Colonial faces vote opposition

The Colonial Motor Company says it is disappointed at plans by the New Zealand Shareholders’ Association (NZSA) to vote against all the proposed resolutions at its annual general meeting this week.

The NZSA has announced it will oppose all four matters being put to shareholders at the meeting in Wellington on Friday, November 10, in an attempt to make the company improve its governance disclosures to investors.

It took to social media late on November 6 to announce its intentions and says the action is in line with “evolving regulatory and investor expectations”.

“While this decision does not bring us joy, the NZSA has a track record of collaborating with listed companies to reinforce their governance standards, leading to tangible enhancements in disclosure and governance practices over the past three years,” the NZSA says in a LinkedIn post. 

“Colonial Motor Company has elected – for now – to refrain from taking on that feedback.”

It adds that it will continue to support and encourage any efforts by Colonial, which operates 19 dealerships, to improve disclosure and hopes for a “more positive” 2024 financial year.

Colonial’s chairman, Ashley Waugh, pictured, says the association announcing it will vote against the resolutions is disappointing, especially given his “willingness to engage with the NZSA ahead of the release of their report”.

Oliver Mander, NZSA chief executive, says the NZSA doesn’t think Colonial meets the expectations of today’s investors because of limited disclosure in its annual reports and on its website, reports the NBR.

He wants the company to provide more information about risk and risk mitigation, as well as disclosure about the composition of the company’s board and skillsets.

Mander told the NBR another matter of concern was that there was only one sentence related to climate risks in the company’s annual report. 

The NZSA’s stand will see it oppose four proposed resolutions that are outlined in Colonial’s annual report, including Stuart Gibbons and Graeme Gibbons being re-elected as directors of the company. 

Graeme Gibbons was chief executive of the group from 1990 to 2021 and has been a director since 1995, while Stuart Gibbons, Colonial’s group manager strategic development, has been on the board since 2014.

Another measure set to be put to shareholders is to authorise an increase in the annual remuneration payable to directors from $305,000 to $330,000 with effect from July 1, 2023. 

The final resolution for the meeting is to record the ongoing appointment of Grant Thornton as auditor, and to authorise the directors to fix the auditor’s remuneration.

In notes to the annual report, the Colonial board says it supports passing all of the resolutions.

Colonial’s response

Waugh, in a statement released to Autofile Online on November 8, says Colonial is a well-governed and compliant listed company, noting the “committed and stable shareholder base is a particular strength of the company”.

He claims NZSA has made a number of factual errors in a report on Colonial, which Waugh says were pointed out to the organisation before publication but went uncorrected. 

“The board does not take the NZSA position personally and the directors appreciate the NZSA has its own agenda and preferences beyond what is required by the listing rules, regulations and legislation,” adds Waugh. 

“One matter that reflects the difficulty Colonial has had in dealing with NZSA is climate-related disclosures [CRD]. Post-publication of its report, NZSA has sought to highlight a lack of information regarding CRD, a subject not a focus of its report. 

“This is something the company has previously indicated it is investing resources into, working diligently on and will be reporting on next year when this is required by the relevant legislation.” 

Waugh continues that Colonial’s board is open to all feedback and other than the NZSA’s report just days before its AGM, it had not received any complaints or negative comments from shareholders or regulatory bodies regarding its disclosures. 

He says the board will review the NZSA report and consider any feedback at its next meeting. “The board considers all information available to it and will always act and make decisions that are in the best interests of the company and its shareholders.” 

With regards to Friday’s AGM, Waugh adds information will, as usual, be presented by him to the meeting as part of his address to shareholders. 

“As is the norm, the meeting will also be open for discussion of the company’s result and matters that may be raised by shareholders,” he says. 

“We would hope the NZSA representative, who will vote on behalf of its members, first considers this information before casting those votes.”