ShareSoc: Boardroom bust-up and director departures?!

I pay £60 a year for membership to ShareSoc, the investor campaigning organisation, and SIGnet, a part of ShareSoc that organises investor-group meetings.

The latest newsletter from SIGnet revealed the ShareSoc director for SIGnet had resigned from the ShareSoc board:

"This then brings us to Thursday 24th March. This was a tough day. It was with disappointment that I tendered my resignation as ShareSoc Director of SIGnet due to disagreements within the ShareSoc board . Not an easy decision but as investors, we all have plenty experience of tough decisions. I will now revert to my previous role within SIGnet helping and assisting both groups and members. I will now wear the badge of SIGnet Lead Group Co-ordinator."

Disagreements within the ShareSoc board” do not sound great. Companies House in fact shows four ShareSoc directors resigning on the same day:

The outgoing directors included ShareSoc chair Sheryl Cuisia, who joined the board during September last year. The SIGnet director was appointed during August while another departing director had served on the board for less than two years.

To me at least, the newcomers look to have disagreed with the old guard. And the bust-up would appear significant given four of ShareSoc’s eleven directors decided to quit. I trust ShareSoc will soon publish a full explanation to its paying members as to what has happened.

Maynard

The fourth departing director, Christopher Spencer-Phillips, was associated with the recruitment firm to which ShareSoc paid £3,067 during 2019:

Possibly putting 2+2 together and getting 5… but perhaps CS-P was involved in the recruitment of recent board appointees Sheryl Cuisia and Karin Schulte, both of whom quit In March. Another director, Penelope Shepherd, was meanwhile appointed during 2019 and left during 2021. Given these new recruits did not stay for long, maybe other board members felt CS-P’s recruitment services were no longer needed.

Checking ShareSoc’s 2020 accounts, I notice total admin costs of £47k of which IT is £7.7k and capitalised website costs are £4.5k:

£12k is a lot of money to be spending on a website for a non-profit organisation with member subs of c£50k. This ShareSoc article from 2017 explains what is going on:

Firstly, the cost of contractor effort to conduct the first phase of the project was ~£6,000, below the original budget. Subsequent phases are expected to cost us a further £18,000

I calculate ShareSoc spent £18k between 2016 and 2020 on website development, of which the first phase (2016-2017) was indeed £6k and therefore implies subsequent phases have so far incurred £12k of the £18k estimate.

In contrast, the UK Shareholders Association (UKSA) gets by on £1.7k a year for IT costs and its website seems adequate enough:

True, UKSA enjoys member subscriptions of c£18k versus c£50k for ShareSoc, but I am not clear why ShareSoc’s larger membership should lead to such materially higher IT costs than UKSA.

What is apparent looking at the books for ShareSoc (and UKSA) is the membership fee being absorbed entirely by admin, IT and other costs not directly associated with the campaigning. The campaigning meanwhile is done on a volunteer basis. If admin/IT costs could be saved, that would leave greater resources for the campaigning – which after all is what members actually sign up for.

Maynard

Interesting stuff Maynard. I am also a member of ShareSoc and SIGnet and for me I feel like I get much more value from the SIGnet arm through attending the various group meetings. ShareSoc I felt seemed like a bit of a tired organisation and I had hoped that the recent director level additions would help to shake it up a bit. Perhaps this is the source of tension? I have to say that for all the money being spent on IT, I haven’t noticed anything better about the ShareSoc website, although admittedly I don’t use it very much (which is perhaps part of the problem).

1 Like

Hi SmoggyPaul,

I speculate some of the new directors were rather overqualified for the roles and perhaps were not the typical PIs the organisation wants to attract as members.

I note two ShareSoc directors who were appointed during 2019 and remain on the board are PIs – one runs “a high conviction portfolio of small cap, cash generative stocks” and the other “takes a mix of contrarian and risk-weighted approaches to his stock picking in both quoted and unquoted companies”.

(Although the departed SIGnet director is also a PI, so a lack of PI-ness does not explain his resignation!)

I suspect the IT development is being conducted behind the scenes and a new website will be unveiled in due course. Assuming £18k in total will be spent of which £12k was spent by 2020, the £4-5k/year rate of expenditure ought to mean the revamped website should be ready this year.

Maynard

Here is the update. Not quite a full explanation though. Full text below:

In recent months ShareSoc began the process of transformation to appeal to a wider circle of investors and stakeholders and to accelerate our growth. This revealed fundamental differences of opinion within the board about ShareSoc’s purpose and governance, and in particular its role as a campaigning organisation. As a result of those differences several ShareSoc board members have chosen to step down.

The Board thanks Sheryl Cuisia, Karin Schulte, Chris Spencer-Phillips for their service and support and wishes them well in their future endeavours.

Ray Williams has rejoined the Board as SIGnet Director. Danny Wallace has resigned from the Board but will continue as the SIGnet Lead Group Co-ordinator and continue to work closely with ShareSoc’s staff and directors in that role.

During Sheryl’s tenure as chair, we established the foundations for ShareSoc’s future development. The board intends to build on those foundations better to fulfil our goal of supporting individual investors via events, webinars, newsletters, comment and educational resources, while empowering individual investors through lobbying and campaigning on their behalf.

Oh dear. "…fundamental differences of opinion" about ShareSoc’s governance does not read well.

Maynard

ShareSoc’s latest newsletter covers the board departures:
ShareSocNews_120.pdf (2.6 MB)

A difference of opinion arose in the board concerning campaigning: whether it was a valuable use of our limited resources, and, if so, how it could be managed in a manner that would minimise risk to the organisation; or whether it was a time-consuming distraction when there is plenty else to be getting on with.

There is no simple answer to this question. The field is tilted against us: companies often do all they can to make it difficult and costly for us to communicate with shareholders; legal fees are expensive and threats are cheap; we are all volunteers - the list goes on.

It was not possible to achieve a common view on this matter, or on the need for ShareSoc to remain largely unconstrained by the corporate and financial services lobby in order to properly represent the interests of individual investors. While we greatly appreciate (and will look to nurture) the encouragement and help of our enlightened institutional and corporate supporters, we do need to be clear who it is we are here to serve, and we need to preserve the independence of mind to be able to carry out that mission objectively.

These issues effectively divided the board, and regrettably we were not able to reach a consistent position. As a result Sheryl Cuisia, Karin Schulte, Chris Spencer-Philips and Danny Wallace have chosen to step down, although Karin continues to oversee the development of our educational video course and Danny to coordinate the activities of SIGnet. Ray Williams has rejoined the Board as SIGnet director.

I am not clear whether the departing directors wanted more campaigning or less campaigning! But the remaining directors still want some campaigning:

The continuing Board feels that ShareSoc needs the ability, on occasion, to say that something has gone wrong and to take a stand against it, alongside the use of softer influence and engagement to bring about improvements in corporate governance.

And this sounds like ShareSoc will soon employ someone to manage the organisation:

On a positive note, these discussions established the foundations for ShareSoc’s future development, and have validated the plan to create an executive function to further improve and professionalise our output and to accelerate growth.

An employed campaign manager could be an idea. Not sure our subs should be going on further administration/IT costs!

Maynard

1 Like