2001 AGM

Published on Saturday 1st September, 2001 by Celtic Trust

The Celtic Trust Resolutions for the Celtic Plc AGM 15th September 2001 Introduction The Motions Resolution 11 Resolution 12 Directors as Representatives of Significant Shareholdings Supporter-Directors at English Football Companies Greater Involvement by Small Shareholders a Feature of the Fergus McCann Share Issue Resolution 13 Resolution 14 Conclusion Introduction The Celtic Trust was established in 1999 with the primary purpose of providing an umbrella organisation that, through the mobilisation of the combined shareholdings of ordinary supporters in Celtic Plc, would seek to assist Celtic to prosper on the playing field and financially, while also staying true to its historic roots as a social institution taking proper account of the community which it serves. In the spirit of partnership the Celtic Trust has requisitioned four resolutions which will be voted upon at the Celtic Plc AGM on Saturday 15th September. The Celtic Trust has submitted the four resolutions as the topics concerned are of major concern to Trust members and to the wider Celtic supporter base. The Board of Celtic Plc, however, is recommending shareholders vote against these motions. The Trust outlines below: the wording of the motions, the reasons given by Celtic Plc for rejecting the motions, the Trusts response to Celtic Plcs arguments for rejection. However, before doing so it is important to note the following facts: The four motions were the subject of an extensive debate at an EGM of Trust members in March 2001. They were approved for submission to the Plc AGM following a postal ballot of all Trust members in May 2001. The Motions The Board of Celtic Plc state: The Board considers that these resolutions, if passed, would interfere with the effective running of the Company by creating an additional and unnecessary administrative burden and restricting the discretion which the Directors require to exercise on a day to day basis. Further, the Boards commitment to improving communications with investors and supporters means that these resolutions are considered unnecessary. Consequently, these Resolutions are not proposed or supporters by the Directors. The Directors recommend you [the shareholders] to vote against these Resolutions as they intend to do in respect of their own beneficial holdings. The Celtic Trust recommends that all shareholders vote for the motions, as this will demonstrate the strength of feeling of shareholders on the four issues and thus encourage the Board of Celtic Plc to adopt a more thoughtful approach to small shareholder liaison in future. Resolution 11 THAT the Company is requested to instigate a programme of consultation with supporters organisations, which shall include quarterly meetings between members of the board and representatives of the Celtic Trust and/or other such supporters organisations as the board deem appropriate, in order to canvass the views of such organisations on issues of concern to such organisations relating to the operation of the Company and/or affairs of Celtic Football and Athletic Club Limited. Celtic Plc Board of Directors state: The Company is committed to communicating with shareholder and supporters groups on various issues. Meetings have taken place on various occasions. The Directors believe however that the imposition of a requirement to do so by way of members resolution is unnecessary and that effective and regular communication will address the issues raised by such groups. In written correspondence with the Trust, and subsequently during his address to the members of the Trust at the Trust AGM on the 8th of September, Celtic Plc chief executive Ian McLeod indicated that he would instigate a series of quarterly meetings with Trust representatives on matters of concern to Trust members. The Trust welcomes this progressive initiative on the part of Celtic Plc, which is in sharp contrast to the attitude of the previous chief executive. However, the Trust is disappointed at Mr McLeods re-iteration of Celtic Plcs ban on any paid adverts by the Trust in Plc publications on the grounds that the Trust is a `sectional interest. The Trust regards it as extraordinary that the Plc should seek to justify a ban on an advert from a group of its own shareholders. Resolution 12 THAT the board is requested to propose a scheme at the next Annual General Meeting for the appointment to the board[s] of the Company and/or Celtic Football and Athletic Club Limited of an elected representative of supporters organisations/small shareholders/season ticket-holders. Celtic Plc Board of Directors state: This proposal does not recognise that directors have a duty to act in the interests of the Company and all of its shareholders rather than any particular group of shareholders or other body. It is inappropriate for such an interest to be the underlying basis of appointment. Increased communication, as explained under Resolution 11, will provide sufficient opportunity for representation of various interests. It should also be recognised that not all members of such organisations are likely to be shareholders in the Company. The Directors believe strongly that it is inappropriate that membership of such an association should of itself give a right to a vote to elect an official to the Board of the Company. The election or removal of directors is properly a matter for shareholders. Directors as Representatives of Significant Shareholdings The Trust believes that Celtic Plc takes a very narrow view of the formal responsibilities of a director. Directors can still act in the interests of all shareholders even if they owe their position on the board to the fact that they represent significant shareholders. In fact it is custom and practice for large investors to have representatives on the boards of companies. For example: In Scotland Daniel Levy is a non-executive director at Rangers plc, representing ENICs significant holding. Also in Scotland; at Hearts Andrew Flanagan is a non-executive director at Heart of Midlothian plc. Mr Flanagan is the Chief Executive of Scottish Media Group (SMG). He was appointed to the Hearts board in October 1999 upon completion of SMG's acquisition of 19.9% shareholding. In England, David Chance was appointed to the Sunderland PLC Board on 12 October 1998. He is a director of BSkyB Group PLC. David is a member of the Sunderland PLC audit and remuneration committees. BSkyB has a 5% stake in Sunderland. In the light of the above the Trust sees no reason in principle why a representative of small shareholders could not carry out the duties of a director in a manner similar to the examples listed above. Celtic Plc should set up a consultation process to facilitate the appointment to the board of such director. Supporter-Directors at English Football Companies It is also the case that there are a number of examples in England where supporter-elected directors have been appointed, and played a full role in the running of their football companies. The most notable example is Northampton Town Football Club. Greater Involvement by Small Shareholders a Feature of the Fergus McCann Share Issue It is also worth noting that when Fergus McCann sold the balance of his shares to supporters in 1999 he fully intended that these shareholders should play a more active role in the running of Celtic Plc; as he stated in an interview with the Daily Record on 7 October 1999: Celtic Football Club itself is an institution which should not be in the hands of one individual or the City. The supporters must make sure they can make their voice heard in the boardroom and they can do that by buying shares. It is also the case that a number of prominent Celtic supporters support the principle of a supporter-director, most notably Billy McNeill, who backed this principle in an interview on the Celtic Supporters Association website in March 2001. (See Celtic Trust website at www.celtictrust.com - Newsletter 2). Resolution 13 THAT the board is requested to ensure that all future general meetings of the Company called by the board are held on a Saturday or a Sunday at Celtic Park, Glasgow. Celtic Plc Board of Directors state: The resolution seeks to impose a requirement that all future general meetings of the Company are held at weekends. The Board wishes to ensure that general meetings take place at a time and place which is convenient to shareholders and consequently the AGM is being held on a Saturday this year, on a trial basis. Various factors need to be considered when setting the date for a general meeting. The Company's AGM is held during the football season. Due to fixture list commitments, availability of the stadium is more restricted than at other times of the year. The fixture list can change due to factors outside the control of the Company. Weekend meetings can only be held on days when either there is no fixture or alternatively when there is an away match. This may inconvenience shareholders who are also attending away matches. Furthermore, due to football commitments, the attendance of the Football Manager cannot be guaranteed. Weekend meetings can also increase costs and there are security and public safety considerations which must be taken into account. The Celtic Trust replies: The Trust welcomes the decision by Celtic Plc to hold its AGM on a Saturday. This is an issue that the Trust has been campaigning on for some time and which was raised most recently by Trust representatives at their meeting with Celtic Plc chief executive Ian McLeod on the 17th July. The Trust is delighted that Celtic Plc has responded positively to this Trust initiative. Resolution 14 THAT the board is requested to carry out a consultation exercise with supporters organisations on the design of all future Celtic first team playing strips prior to their introduction. Celtic Plc Board of Directors state: The Company carries out pre-marketing work prior to the launch of a new strip. Such launches can make a significant contribution to the commercial success of the Company. Widespread consultation can lead to delay and can jeopardise the confidentiality of design thus reducing the prospects of a successful launch. The most recent launch has proved to be very successful despite opposition in some quarters. The Directors recognise supporters concerns about the frequency and nature of changes to the strip and consider such matters carefully before deciding upon any change. It is considered that a requirement to carry out a consultation exercise on design of all future first team strips is an undue restriction on the commercial interests of the Company and cannot be recommended. Prior consultation makes for better product. In a letter to the Trust of the 14th March Celtic Plc public relations officer Kate Cunningham stated that for future kit launches `timely consultation with a number of supporters across our broad fan base would be introduced. In the view of the Trust this is a very vague formula. The Trust would like to see the Plc commit itself to a more formal process of consultation. The reasons for this are as follows. As mentioned above the duty of the directors is to the company. Further, the fiduciary duty of the directors requires them to consider and to give appropriate weight to all of the companys key relationships. In any business it makes little sense to have aggrieved or dissatisfied customers. In a business where the customers have a relationship which is much deeper than simply an economic one, the Trust believes that it simply cannot be in the best interests of the company as a whole to do anything other than consult with its supporter/customers. Support for this resolution would copper-fasten this consultation process. Conclusion The members of the Trust share the delight of all Celtic supporters at the great success on the playing field of Celtic Football Club in the last 12 months. The thousands of small shareholders that bought shares in Celtic and helped re-finance the club played a critical role in laying the foundations for this success. The Trust is seeking to further exert the positive influence of these small shareholders by raising these resolutions on issues of concern to Celtic supporters and small shareholders. The Plc AGM will thus become a forum for true debate, and not just a rubber-stamping exercise as at so many football company AGMs around the country. The Celtic Trust is seeking to establish a partnership with the Board of Celtic Plc Working Together For Celtic.


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