The vote, by 24.2mln (55%) votes to 20.1mln (45%), signifies a victory for dissident shareholder Phoenix UK Fund, which holds just under 30% of the company.
Shareholders representing around 88% of the issued shares of the funeral services company voted on the resolution.
Gary Channon, a representative of Phoenix, was voted on to the board as an executive director by 26.8mln (61%) votes to 17.5mln (39%).
“At the request of a number of the company's larger shareholders, since this shareholder meeting was convened, the independent directors have held substantive discussions with both Phoenix and Clive Whiley in order to try and find a mutually acceptable solution which would allow the company to benefit from the continued involvement of both Clive Whiley and Gary Channon (as a representative of the company's largest shareholder) in developing the company's strategy for the consideration of all shareholders. A proposal was put to Phoenix whereby Clive Whiley would continue as chairman, but in a non-executive capacity, with Gary Channon being appointed as interim chief executive officer until a more permanent appointment can be made. In spite of the best efforts of the independent directors and the willingness of Clive Whiley to proceed in this manner, unfortunately, it has not been possible to reach such a compromise,” said Dean Moore, the acting chairman of Dignity.
The fall-out started, according to Phoenix, when it uncovered what it believes are very serious issues in the prepaid funeral plan business.
“We gathered the relevant information and sent it to Clive ahead of the budgeting process and finalisation of the annual results. In our view, his subsequent actions in dealing with the matter, internally and externally, left us no choice but to seek his removal as a director,” it said in a call-to-arms message to shareholders last month.
Dignity, for its part, criticised Phoenix for making public some of the strategic plans being proposed by the funeral company as the two sides continue their boardroom battle.
One of the fund’s proposals is for Dignity to spin out its crematoria business, while retaining a majority holding, to raise capital and highlight the value of the remaining Dignity shares.
“There are significant nuances to any strategic plan of this nature before it can be made public,” the independent directors griped in response to Phoenix going public with some of its plans.
The independent directors – Gillian Kent, Paul Humphreys and Dean Moore – said that the decision to spill the beans on the options being considered cast doubt on the suitability of Gary Channon, Phoenix UK’s chief investment officer, to be given executive duties. With Channon and co having won the day, it is no surprise Kent, Humpreys and Moore have tendered their resignations.