Link Securities | Many international investors take a dim view of the formation of hard core shareholder groups in Spanish companies as they believe that shareholders with a minority stake can exercise almost total control thanks to their weight on the boards of directors, as reported today by Expansión. Thus, several large US funds, with the support of their corporate governance advisors (proxy advisors), are going to vote against Colonial’s next Extraordinary General Meeting, in which the entry of two directors representing CriteriaCaixa is proposed, having raised their stake from 3% to 17%.
ISS, the main international proxy advisor, justified its recommendation to vote against the recommendation on the grounds that only 29% of the Board will be made up of independent directors, when it considers that in companies without a controlling shareholder (such as Colonial) at least half of this body should be made up of neither executive nor proprietary directors, in order to represent the minority shareholders.
