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Shoprite loses independent director after Wiese re-elected

Shirley Zinn cites personal reasons for her departure, Christo Wiese says.

Shoprite Holdings’s lead independent director, Shirley Zinn, resigned abruptly, two days after Christo Wiese’s almost 30-year stint as chairman was extended despite a majority of investors voting against his reappointment to the board.

Africa’s biggest supermarket chain is now down to five non-executive directors and the company gave no reasons in a statement on Wednesday for Zinn’s departure. She also declined to comment on her decision to leave when contacted by phone.

The Shoprite board met on Monday to map out a way forward following the vote at its annual general meeting, where holders of more than 61% of the shares opposed Wiese’s re-election. Earlier this week, Zinn said succession planning with regards to the chairman position was underway.

“She handed me a letter saying she was leaving, citing personal reasons,” Wiese said by phone. “This was after agreeing on an orderly path forward,” which includes adding additional board members and a plan for a new chairman.

Read: Wiese re-elected as Shoprite chair, despite investor backlash

Wiese, 78, has held extra voting shares for more than 40 years, part of a type of founder’s benefit. It was this stock that ensured he was re-elected. Shoprite attempted to curb Wiese’s voting power earlier this year with the chairman’s support, but was forced to scrap the plan after investors objected to the likely R3.3 billion cost of compensation.

“Shareholders are not prepared to pay for him to go away, but also don’t want him to stay and keep control,” Charles Allen, an analyst at Bloomberg Intelligence, said by phone on Thursday. “Shoprite’s operational performance is improving, but in parallel, there is this major governance issue that is difficult to resolve.”

On Monday, Shoprite reported improved trading at its South African stores, with local supermarket sales climbing 10% in the three months through September.

Read: Shoprite defies SA’s downturn, as domestic sales surge

Zinn joined Shoprite’s board just over 14 months ago and also sat on the grocer’s remuneration and ethics committees. Iaan van Heerden, who last month joined Wiese’s family office together with a former investment banking colleague, has been nominated for a board seat. This, along with other nominations made, will go through all relevant committees, Van Heerden said.

“I guess the way forward will be to have negotiations led by investment bankers that can come up with a deal that is acceptable for everyone,” Allen said.

© 2019 Bloomberg

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Gender Transformation MUST be implemented….. just look at board composition at any company linked to Wiese and one will see the lack of women at board and/or exco/management levels.

Very sad these JSE listed companies are still “living” in the OLD South Africa.

SHAME ON THEM

Frankly i think you have missed the point. If i am a shareholder i dont care if there are Pink Flying Elephant Aliens on the board as long as those board members are earning their salaries by making the shareholders money and engaging the employees to be productive and happy to make a profitable business. Its not sad its no shame its a business and it makes profits which give employees salaries and investors ROE. If its running at a loss employees lose jobs and board members should get replaced. SIMPLE. SASOL is a good example the US CEO and RSA CEO both were fired because they both failed in their duties. But oh theres no shame on those leeches getting FAT salaries for years and losing the investors and companys wealth?

Rats, ships

Nobody could pay me enough non exec director fees to take on the risks associated with some fellow board members

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