British boardroom structures don’t allow enough debate, claims Sir Stelios Haji–Ioannou, founder and majority shareholder of the low-cost carrier, easyJet. As a result he has quit his board role to become an activist shareholder in a bid to turn the company’s strategy around.
Sir Stelios’ fight is focused on the lack of a cash dividend payment and the board’s intention to expand the fleet by another 24 planes. easyJet already has a contract with Airbus for another 59 aircraft which Sir Stelios wants to be renegotiated.
A shareholder meeting may be in the offing – with a 38% stake Sir Stelios has what it takes to getting a protest vote off the ground, what he may not have is enough support from the remaining institutional shareholders who have, according to press reports, dismissed his strategy as being more reflective of his own need for cash than creating long-term shareholder value. However according to the Sunday Telegraph, when asked whether his actions were because he faced financial difficulties, he said: “If you are going to start the story that I’m running out of money, I’m going to call my libel lawyer.”
Whatever the real root cause of Sir Stelios’ dramatic departure, it was interesting to note what he said about board dynamics. Speaking to the Independent, he said: “The executive is too powerful and too many of the executives – and non-executive directors – just go along with what the chief executive is doing without enough criticism. Just look at what happened at RBS and Sir Fred Goodwin and you will know what I mean.”
Boarding cards for an easyAGM could be in short supply.