Key facts
- Activist investor Kelso accused The Works' board of using its Employee Benefit Trust to sway a shareholder vote.
- The vote concerned the appointment of former Card Factory executive Graeme Coulthard to The Works' board.
- Coulthard's appointment was rejected by 51.6% of votes cast.
- The Works stated its Employee Benefit Trust is managed by an independent trustee.
- Kelso owns 10% of The Works and previously voted to oust chairman Steve Bellamy.
Activist investor Kelso has accused the board of The Works, an arts and craft retailer, of improperly influencing a crucial shareholder vote. Kelso sought to place Graeme Coulthard, a former Card Factory executive, on The Works' board. The retailer's board opposed the move, warning it would "derail" its strategy.
During the shareholder vote on Monday, Coulthard's bid for a board seat was defeated with 51.6% of votes against, compared to 48.4% in favor. Kelso's chief executive, John Goold, alleged that The Works' board inappropriately allowed its Employee Benefit Trust (EBT) to determine the outcome. The EBT, which holds 4% of the company's shares and is used for management bonuses, voted in line with the board, according to Goold.
Goold expressed his "staggered" reaction to the board's alleged refusal to meet with Coulthard and questioned the propriety of the EBT's voting power in such a close contest. A representative for The Works stated that the EBT is administered by an independent trustee company, and the board has no control over its voting decisions.
Kelso, which owns 10% of The Works, had also previously voted to oust chairman Steve Bellamy. Bellamy, who denied Kelso's accusations regarding his residency and board meeting attendance, retained his position with 77.6% of shareholder support. The Works' board had cautioned that Coulthard's appointment would create an "unnecessary distraction" and risk derailing its growth strategy.