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Glencore proves investors can’t undermine the board if they’re not allowed to dig too deep

Clear the Air says: I wonder if Anson Chan was there ? she joined Murray on the board of then major BAT investor Richemont until exposed.

Series: Business leader


Glencore proves investors can’t undermine the board if they’re not allowed to dig too deep

The London-listed commodities giant got through its inaugural AGM unscathed – perhaps because it took place in a small theatre in Switzerland with questions submitted in advance

David Simonds Glencore 13.05.12

Glencore could not have chosen a more closeted venue for its stage-managed AGM on Wednesday – its first shareholders’ meeting since its flotation on the London and Hong Kong stock exchanges a year ago. Thecommodities firm picked a small theatre in Zug, Switzerland, for its executives’ first outing: a slick show that – remarkably for a FTSE 100 company at a time of unprecedented shareholder protest – ended with polite applause.

Glencore, however, took no risks that its executives might be blindsided by awkward investors, telling shareholders that “for good order” they should submit their questions to the company in writing at least two days before the meeting. It even took the precaution of trying to identify who was going to turn up by asking if they planned to arrive in town by train.

Only a few dozen people bothered to take in the delights of Zug, which promises “unique sunsets” and “world-famous Zug kirsch cake”. Among them were protesters publicising Global Witness’s allegations that Glencore may have had a role in the secret and possibly corrupt sale of stakes in mines in the Democratic Republic of Congo (DRC), but they were outnumbered by policemen. There were only four shareholder questions – a situation the chairmen of other FTSE companies like BP and Marks & Spencer, who annually run the gamut of organised protests, would probably relish.

Perhaps the special measures were designed to protect Glencore’s gaffe-prone chairman Simon Murray, who has shown he cannot always be relied on to make sensible off-the-cuff comments in public (his remarks about the dangers of hiring women in case they get pregnant spring to mind).

Two of the questions concerned the DRC allegations, to which Murray responded that Glencore had behaved properly and regarded bribery and corruption as totally unacceptable. But he dismissed the suggestion of an independent inquiry into the allegations.

The other two questions concerned Glencore’s opaque tax affairs and implied the company should reveal more about how much tax it actually pays. Good news there too, Murray said: Glencore fully obeys the law in all the countries in which it operates – a glib catch-all that will not have satisfied those who say Glencore is too secretive for anyone outside the company to assess whether it is avoiding tax or not, and that no company should claim credit for merely obeying the law.

The only encouraging part of Murray’s answer was his acknowledgement that there is now a debate about how much companies should reveal about their finances. Many campaigners want multinationals to be forced to disclose much more data, to help tax authorities detect if a firm is shifting profits out of the countries where they are earned and into tax havens such as Switzerland. One possible solution would be for multinationals to set out profits made and taxes paid on a country-by-country basis.

So Glencore came through its first AGM remarkably unscathed, albeit after using a few obvious strategies to exclude virtually all its critics from the first public gathering of shareholders. But such a controversial, vast business – which could get larger still if it merges with Xstrata – warrants far more scrutiny. Between now and its next AGM, shareholders should shame it into holding the meeting in London – and ensure that they are better prepared for its stage-management.

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