Lakehouse – Corporate Governance is Not Just About Box Ticking

The affairs of Lakehouse where major investors Slater Investments and Steve Rawlings have requisitioned an EGM to remove and replace the non-executive directors has been covered in previous blog posts. Slater has now issued some explanation for the reasons which can be read here: http://www.investegate.co.uk/slater-investments/rns/egm-statement/201604010700107965T/

The board of Lakehouse criticised the three new directors proposed on the basis that they were not independent and hence that corporate governance rules were being broken. The requisitioners say though that “Corporate governance is not just about box-ticking”. They are quite right in the sense that the UK Corporate Governance Code is based on “comply or explain”, and they say that they initially want to focus on more important issues – namely getting the company “back on track” as the best way to restore shareholder value. But they would address the issue of the balance of executives versus non-executives at a later date.

It would seem from what the requisitioners say and what the company has now said in response, that although the company might have accepted two of the proposed nominees as a compromise to avoid a vote (and all the costs of a proxy battle), they would not accept all three. It looks like they simply do not want Steve Rawlings, a company founder, back on the board. So now we know what it is really about which we did not before!

Comment: this seems to me somewhat unreasonable. Even if they dislike Mr Rawlings or doubt his competence for some reason, being one director among many could surely not be that awkward. Methinks they protest too much.

Roger Lawson

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