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Suggested new structure for PVFC


Valiant62

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A board of 4 executive directors and CEO with non-exec status. No more, no less.

One director will be derived from a new shareholder association which every shareholder will have the option of proxying their vote to, the other three will be made up of the three people with the largest shareholding who have decided not to proxy their vote to said association. Each director (apart from the one derived from the shareholder association) must hold no less than 10% of the share capital (which may include proxies), and the chairman will be the person with the greatest share holding. Decisions will be made on the basis of one director = one vote with the chair having the casting vote.

The shareholders' association will hold elections for its representative director every year. The elected director may stand for re-election after his / her first year. If re-elected twice, after the third year's office must step down to non-exec status to support a new elected representative. Two years later, (s)he would be eligible to stand for election again.

Shareholder association director is voted in using a one shareholder = one vote system.

 

There will be no ceiling on shares issued and the usual due diligence stuff on investment.

 

My argument would be that this gives a significant say to small shareholders which maximises accountability while allowing for transactional leadership within a small flexible board. No upper ceiling on percentage ownership, so the more someone like Mo Chaudry bought, the more it would take to remove him as chair, but by the same token he has to take someone else along with him every step of the way.

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A board of 4 executive directors and CEO with non-exec status. No more, no less.

One director will be derived from a new shareholder association which every shareholder will have the option of proxying their vote to, the other three will be made up of the three people with the largest shareholding who have decided not to proxy their vote to said association. Each director (apart from the one derived from the shareholder association) must hold no less than 10% of the share capital (which may include proxies), and the chairman will be the person with the greatest share holding. Decisions will be made on the basis of one director = one vote with the chair having the casting vote.

The shareholders' association will hold elections for its representative director every year. The elected director may stand for re-election after his / her first year. If re-elected twice, after the third year's office must step down to non-exec status to support a new elected representative. Two years later, (s)he would be eligible to stand for election again.

Shareholder association director is voted in using a one shareholder = one vote system.

 

There will be no ceiling on shares issued and the usual due diligence stuff on investment.

 

My argument would be that this gives a significant say to small shareholders which maximises accountability while allowing for transactional leadership within a small flexible board. No upper ceiling on percentage ownership, so the more someone like Mo Chaudry bought, the more it would take to remove him as chair, but by the same token he has to take someone else along with him every step of the way.

 

Something major wrong there, an executive Director is a fully paid officer of the club who would work full time, and a non-executive is an independant Director who should act independantly ensuring the excutives work in the sharholders best interest, and they generally only work a few hours each month. Never seen a non-exec CEO, that is not possible!

 

The company needs a fulltime CEO, a Chairman, and the other 2 should be non-exec. The important fact here is that the non-exec's should be aware of everything that is going on (such as £1.6m investments!). Any non-exec who is any good would insist on this, and not just use the position for free lunch's and free tickets!

 

:rolleyes:

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Would that make it possible for one director to force others to buy shares to maintain their 10%.

I would prefer to see directors who could "do" something rather than just throw money at it if they wished to keep their directorship

What happens if someone decides to invest an extra 1M of shares? do all other directors have to stand down because they fail the 10% rule?

Is it equitable to have a shareholders association [representing 2%] if individuals or groups hold 12%/10%/5% [as the 10% rule does not apply to the association]

Not a criticism just questions

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Dont have a problem with a director staying more than 3 year's.But each director when up for re election must give out some sort of manifesto.This would explain in brief what this directors role is within the club.What they have done over their period of directorship.What they intend to do over their period,and why we should vote for them.If they promised prior to their previous election but failed to deliver on any proposal then give a brief outline why.

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All my suggestions are those of an enthusiastic amateur - may not have got terminology right. My intention re "executive" was having the right to vote on decisions, with CEO not having that right (unless shareholder assn voted him / her as their director of course). Therefore could upthevale's comments be made to add rather than take away from the suggestion?

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Dont have a problem with a director staying more than 3 year's.But each director when up for re election must give out some sort of manifesto.This would explain in brief what this directors role is within the club.What they have done over their period of directorship.What they intend to do over their period,and why we should vote for them.If they promised prior to their previous election but failed to deliver on any proposal then give a brief outline why.

 

Future re-elections will depend entirely on Mo, if he maintains a 51% shareholding. It wont matter how successful directors have been or otherwise, if Mo wants them they will stay.

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Future re-elections will depend entirely on Mo, if he maintains a 51% shareholding. It wont matter how successful directors have been or otherwise, if Mo wants them they will stay.

 

unless we can negotiate a different structure

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Obviously, then the club becomes likely to have less investment. People cannot have it both ways. If shareholdings are limited, then so is investment.

 

The 24.9% rule only safegaurded the current directors, as it became another barrier that proposed investors would not see as being fair.

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Obviously, then the club becomes likely to have less investment. People cannot have it both ways. If shareholdings are limited, then so is investment.

 

The 24.9% rule only safegaurded the current directors, as it became another barrier that proposed investors would not see as being fair.

 

... but the structure above puts a lower limit, not a higher limit on director investment, together with the article Jean linked there seems to be scope for negotiation. Surely it's a good thing to generate ideas and meet the interests of people like me who want "a ring on our finger" before we make mad passionate love.

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I doubt that. Mo wants control.

 

I think he wants the level of influence corresponding to his investment. That isn't an unusual stance in any way shape or from. I don't see it as an unreasonable request.

 

Indeed, I can only really see at Port Vale some bizarre logical assertion that people should investment millions but accept nominal influence in return for it.

 

The rest of the real world doesn't work that way so why should our club?

 

And as has been pointed out a number of times, if Mo were to buy 51% based on the current shareholding, there is nothing to stop others continuing to invest and to thus change his position unless Mo continues to match the investment. Which I can only really see upside to as the more money comes into the club the better.

 

It is about time we moved away from this small time mentality and actually started to think like a proper business, and most in this climate would love to have something willing to invest £1.2 million for 51% of a business that is arguably worth a considerable sum less than the investment amount.

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... but there are different types of business e.g. social enterprises, CICs etc.

The biggest investor in the above would have massive influence as well as the accountability he needs to demonstrate for his own purposes and an exit strategy that doesn't involve what BB or BB have had to go through.

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