Proxy advisory firm Institutional Investor Advisory Services’s (IiAS) recommendation to vote against a resolution to reappoint 31-year-old Rama Kirloskar to the board of (KBL) and also her appointment as joint managing director triggered a war of words between her father Sanjay Kirloskar (Chairman of the Company), and the proxy advisory firm through series of emails.
Proxy advisory firm’s reasoning was that individuals must have an established track record and work experience of at least ten plus years before being appointed director on the boards of the listed companies.
The Chairman however called the proxy firm inconsistent in it’s recommendations. He said that the proxy form, in the past, has recommended in favor of some other individuals of lower age for a similar position in other Companies. He also said that it is quite common practice in promoter led groups and many youngsters have proved successful and created enormous wealth for the shareholders.
In response, IiAS said that most other youngsters mentioned by the Chairman are founders or first generation entrepreneurs and defended their recommendation to vote against the daughter.
There was some further to and fro on the issue, which is not worth mentioning and frankly there was no need for any of this.
Proxy firm had made it’s recommendation based on their policy. Company has the right to make suitable representation that proxy firm is obligated to forward to the shareholders along with it’s recommendation.
Ultimately, it’s for the shareholders to decide.
For easy reference, promoters own 66% of KBL and so atleast theoretically they should not look to push through their decision without hearing out the balance 34%.