Comair Limited AGM was refreshing; though there is still some way to go

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Comair Limited AGM was refreshing; though there is still some way to go

Published Date: 2019-11-01 | Source: INCE|Community | Author: Chris Gilmour

Comair Limited AGM was refreshing; though there is still some way to go

Comair held its annual general meeting (AGM) on Tuesday 29 October and, as expected, corporate governance (or the lack thereof) was high on the agenda. In our previous note, we appealed to incoming chair Lindsay Ralphs to send a warning shot across the Comair board's bows regarding the chairman's remuneration. The remuneration for last year of R 1.59M was approved but the increase in Board fees for 2019/2020 resolution was defeated and the Board will have to reconsider.

Ralphs also made it clear that Bidvest is not happy about the lack of independence of some of Comair's non-executive directors and that he will undertake to shake up the board. We wait to see if that indeed occurs but he appears to be off to a good start.

Meanwhile, Comair Shareholder Danny Tuckwood asked the board a number of questions and highlighted his assertion that independence of directors cannot be guaranteed when directors have been on board for 30 or 40 years. And of course he is correct in this assertion. The board noted Tuckwood's questions and assertions without addressing them. But there is another element to Tuckwood's line of questioning that goes beyond the normal business of an AGM.

Tuckwood has a very good working knowledge of Comair, with his company-Metaco-having been acquired and then summarily disposed of by Comair in less than a year. Metaco is currently involved in an arbitration process against Comair, the details of which are beyond the scope of this article.

But once again, governance aspects were highlighted in this issue. Metaco was working closely with Comair in the area of strategy and leadership when it was summarily dismissed by joint CEO-to-beGlenn Orsmond in mid-July 2019. Orsmond also demanded that Metaco immediately repay the initial payment of R12.8 million in terms of the original sale agreement. Interestingly, Orsmond's appointment as joint CEO was only due to take effect from 31 July 2019, leaving observers to ask the inevitable question of whether or not Orsmond exceeded his authority. Once again, an issue relating to corporate governance.

The bottom line is that this AGM was refreshing; though there is still some way to go.

The Metaco issue is one that needs to be addressed if Comair really believes that it adheres to the highest standards of corporate governance.



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