888 Holdings PLC (LON:888) and PPHE Hotel Group Limited (LON:PPH) have defended decisions to put several long-serving non-executive directors up for re-election following stiff opposition from shareholders.
FTSE 250 casino group 888 said investors representing 21.3% of its shares had voted against the re-election of non-executive chairman Brian Mattingley at its AGM in May, due to what it said were concerns around his tenure.
Mattingley joined the board of 888 in 2005 and since then has served as the group’s chief executive, non-executive director, executive chairman and non-executive chairman.
The company defended its decision to nominate Mattingley for re-election despite his long tenure, saying his “wealth of gambling industry and public company experience, deep knowledge of the business and industry contacts” benefitted shareholders.
Similarly, PPHE said two of its long-serving directors, Kevin McAuliffe and Nigel Jones, were “highly effective and engaged members of the board” after major independent shareholders opposed their re-appointment at an AGM vote in May. Both directors have served on PPHE’s board for over nine years.
Under UK corporate governance rules, directors are expected not to serve on the board for more than nine years, as a long tenure is considered a detriment to their independence.
However, the system came under criticism this week from Tim Martin, chairman of pub group JD Wetherspoon PLC (LON:JDW), who said the current system was “up the spout” and had “directly led to the failure or chronic underperformance of many businesses”.
He also blamed the rules around director term limits for institutionalising “short-termism, inexperience and navel-gazing”.
In lunchtime trading on Friday, 888's shares were 2.3% higher at 163.4p while PPHE ticked up 0.1% to 1,882.7p.
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