A couple weeks ago, we ran an article from Canadian capital markets veteran Adam Adamou in which he argued that the plurality voting system employed by most Canadian public companies is inherently flawed. Adamou said shareholders should demand majority voting, a practice that has emerged as a best practice for board selection in Canada.
Today, in advance of International Datacasting’s (TSX:IDC) annual general meeting at the end of this month, Adamou filed a dissident proxy circular. Adamou who is a director and the former executive chairman of the company, proposes an alternative slate of directors for the company that he says will implement a “pro-active growth plan.”
While Cantech Letter has no formal opinion on the matter, and is not a shareholder of the International Datacasting, we felt today’s press release would make a suitable companion piece to the corporate governance issues raised by Adamou in the widely read article “Why Canadian Shareholders need to Demand Majority Voting Now.”
Talking to Cantech Letter today, Adamou said that while dissident proxy circulars are fairly common, it’s a lot less common for an existing director to file one. He says the entire process that began today would be superseded if International Datacasting employed majority voting. As it stands, he says, “the entire process is expensive, complicated, and not for the faint of heart”.
Here’s Adamou’s statement to shareholders:
“Dear fellow International Datacasting Corp. shareholders:
Your board of directors is dysfunctional.
Over the last three years, we have moved from strategy to strategy without committing to a single long-term vision. Our share price is at multiyear lows. Our trading volumes are at all-time lows. Our board is micromanaging the business instead of establishing and supervising the execution of strategy. We have more board committees than we have directors. Some board committees were established to engage in work that is clearly the responsibility of management — like executive searches — other committees meet monthly with the CEO to review cost-cutting, and research and development spending. Key independent directors have resigned and the slate presented to you by the IDC board was identified through a process ultimately concluded only by Frank Ruffolo and Graham McBride.
I fear that our present course will not end well for IDC shareholders.
We need a change. This can only happen through a new governance structure implemented by a new board of directors that empowers the existing operational team to execute IDC’s organic growth plans, combined with a pro-active growth plan managed through a business acquisitions strategy and appropriate board oversight.
Voting in favour of our nominees for positive change may be the single most important vote that you ever make as a shareholder of International Datacasting Corp.
We encourage all IDC shareholders who share our vision and our disappointment to please vote your shares by completing, signing and returning the form of proxy or voting instruction form available on SEDAR. Only our universal blue proxy and voting instruction form includes the names of the entire director nominees for positive change and other matters to be considered at the meeting.
We urge you to ignore the IDC board proxy or voting instruction form sent to you by IDC as it will not allow you to vote for the nominees for positive change.
For up-to-date information, follow us on twitter or call our IDC positive change hotline at 1-647-261-7289. Full instructions on how to vote are set out in the enclosed proxy materials.
Let’s put IDC together again.
Adam E. Adamou”