Issuers must not construct mechanisms that entrench existing management
posted on
Mar 22, 2014 08:33PM
Keep in mind, the opinions on this site are for the most part speculation and are not necessarily the opinions of the company WITHOUT PREJUDICE
If we read this rule below about entrenching management, we see the words "must not construct mechanisms". By not implimenting a "Majority Voting Policy", management has "constructed " a mechanism that will allow current management to remain entrenched in their current positions. We see that it is not allowed by the said policy, we also see that where the absence of a Majority Voting Policy has been constructed, there may have to be another AGM with a more democratic voting process.
To further the argument, management was in receipt of the "Majority Voting Policy request, they had to take action(construct), to either impliment the policy or not, they obviously chose to construct and reinforce the current standard that leaves management entrenched by only receiving 1 "for" vote. An entrenching mechanism as such, leaves it almost impossible to ever remove an undesirable BOD, and thus, is entrenching.