The biggest shareholder in Canada’s largest grain handler has mounted an offensive against what it describes as Viterra’s closed-door approach to renewal on its board of directors.
Alberta Investment Management Corp. (AIMCo), a Crown-owned investment manager for 26 public-sector pension, endowment and government funds in the province, publicly aired Tuesday that it "will not accept the vague plans for board renewal announced by Viterra" on Friday.
Edmonton-based AIMCo said it doesn’t believe Viterra’s current directors are prepared to make "meaningful changes to the composition of the board" and that the grain company’s proposed process will lead only to "further entrenchment of an unresponsive and unaligned board that may limit the company’s long-term potential."
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Viterra retorted Wednesday that it won’t publicly respond to AIMCo’s commentary — other than to say its nominating and corporate governance committee will work with two "internationally-recognized search firms" to find suitable candidates for its upcoming annual shareholders’ meeting, and for replacements of two directors who plan to step down from the board at that time.
"As part of its mandate, the committee will continue to seek input from Viterra stakeholders, including AIMCo," Viterra said.
Holding a stake of over 17 per cent, AIMCo said in Tuesday’s release that it has been Viterra’s single biggest shareholder now since 2009 and has become "dissatisfied with Viterra’s performance."
The fund manager said that over the past 18 months it has identified and repeatedly called on Viterra’s board and chairman for "several governance changes that we believe are critical to Viterra’s long-term success."
Among those, AIMCo said it "does not believe that the current Viterra board has the required skills or experience to meet the company’s leadership needs as a growing international agribusiness."
"Meaningful input"
Viterra’s board, AIMCo said, "continues to insist that it must deal with these important governance issues behind closed doors, thereby limiting meaningful shareholder consultation" and that the process be "managed by the same directors who have been consistently unresponsive to legitimate shareholder concerns."
To that end, AIMCo said Tuesday, it warned the board a few weeks ago it would move to requisition a Viterra shareholders’ meeting and make changes to the board if Viterra didn’t make changes on its own.
Viterra’s response, AIMCo said, was a statement Friday that it will hold its annual shareholders’ meeting March 8, 2012 in Calgary, and that two directors — Saskatchewan farmer Vic Bruce and South Australia farmer Paul Daniel — will not seek re-election to the board.
The company’s statement, AIMCo said, "introduces yet more processes that, in AIMCo’s view, will delay substantive change and continue to deny shareholders any meaningful input."
Rather, AIMCo said, "Viterra and its board need a strong message from shareholders that further platitudes about seeking shareholder input and closed-door processes are not satisfactory."
Instead, it said, Viterra should "work collaboratively with AIMCo in a meaningful way to identify appropriate directors for nomination."
Viterra said Wednesday that AIMCo first raised its issues in February, it has discussed with AIMCo views about board composition, and it has invited AIMCo to "re-engage in such dialogue in a constructive manner" while the committee’s work continues.
