Investec plc (Investec) has once against suffered a shareholder revolt at its annual meeting on 4 August 2022, with 29.5% of votes cast against its political donations resolution. It is perhaps unsurprising that Investec has again received investor dissent, the asset manager having suffered multiple significant no votes (at least 20% investor opposition) at its AGMs for the past couple of years. However, what is surprising is that Investec’s 2022 AGM only saw one significant no vote, its shareholders skipping over their usual points of contention, executive pay and the re-appointment of auditors, to target the company’s political donations resolution.
This is not the first time that Investec has suffered a significant no vote against its political donations. At its 2021 AGM, alongside dissenting votes against the company’s remuneration report and the auditors of Investec plc and Investec Ltd, the political donations resolution just scraped over the significant no vote threshold, at 20.1% of votes cast against. Unfortunately, Investec’s 2021 and 2022 AGM Results, as well as the company’s 2021 update statement, provided little information as to the reasons why the asset manager is facing increasing shareholder dissent against its political donations:
‘As stated in the notices to the AGMs, Investec plc does not give any money for political purposes in the UK nor does it make any donations to UK political organisations or incur UK political expenditure. However, the definitions of political donations and political expenditure used in the UK Companies Act 2006 ("UK Companies Act") are very wide. In line with UK market practice, the authority is therefore requested only as a precautionary measure to ensure that Investec plc and any company which is or becomes a subsidiary of Investec plc does not inadvertently breach the relevant provisions of the UK Companies Act.’
Investec’s ‘The way we do business’ document also does not shed much light on the shareholder dissent, noting in relation to political donations that:
‘Investec does not engage in any party political campaigning. We may conduct dialogue with government on issues relevant to our business and ensure this is done transparently and with the best intentions for the growth of the economy and our business. On ad hoc occasions, in South Africa, political donations may be made to progress democracy during an election year but only under the strict approval of the board of directors which will be publicly disclosed in our annual reports. In these instances, equal amounts will be given to the majority parties.’
Investec’s 2021 and 2022 Annual Reports (pages 158 and 133 respectively), state that the company did not make any political donations during both financial years. Perhaps it was the lack of political donations that a minority of shareholders had a problem with. Investec plc’s three top shareholders are South African, the largest being the Public Investment Corporation (PIC), which holds a 12% stake in the asset manager (as well as a 13.5% stake in Investec Ltd). According to the PIC’s disclosed Listed ESG Proxy Voting Report for Q2 2021, it decided to vote against Investec’s 2021 political donations resolution. Although the PIC is yet to disclose its voting for 2022, given Investec’s similar stance this year, as well as the even higher level of dissent, it is likely that the South African asset manager again decided to oppose Investec’s political donations resolution at its 2022 AGM. However, the PIC has given no rational as to why it decided to vote against in 2021, merely noting in relation to political donations and incur political expenditure resolutions that:
‘The PIC is of the view that there should be clear independence between companies and political parties to ensure that there is credibility in government decisions making processes with a direct impact on business to eliminate misperceptions of partiality or favour.’
Its current proxy voting policy also provides no insight with regards to how the South African asset manager votes in relation to political donations. In the absence of any disclosed reasons for the revolt, shareholders will have to wait for an official explanation in Investec’s update statement, which the asset manager should publish within six months under provision 4 of the UK Corporate Governance Code. However, given that the company’s 2021 statement failed clarify things further regarding dissent against the political donations resolution, it is likely that the 2022 statement will do the same and again regurgitate the same text that it disclosed in its AGM Results.
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