Climate backlash rocks Grafton as 21% of shareholders vote to give chairman the boot
Grafton chairman Michael Roney (pictured)
Grafton Group said its record on climate and gender diversity were among the reasons 21 per cent of shareholders voted against re-electing its non-executive chairman.
The Irish DIY retail giant launched a consultation after more than a fifth of investors chose not to support the resolution to re-elect Michael Roney at the firm’s annual general meeting in May.
The FTSE 250 firm said yesterday ‘a mix of factors’ were behind the shareholder rebellion.
Two institutional shareholders said they voted against his re-election because the company has not set net zero targets or published data for Scope 3 – those a firm is indirectly responsible for up and down its value chain – emissions.
Two more cited insufficient gender diversity on the board and at senior management though Grafton said three of its eight board directors are women.
Last week, Grafton committed to delivering net zero carbon emissions by the end of 2050 as it released its half year report.
The firm said it will set science-based targets by the end of 2024 and pledged to develop a transition plan that shows how these targets will be achieved, how progress will be monitored and the estimated financial impact of implementing them.
The firm’s statement said: “As also outlined in the Half Year Report, Grafton takes its climate change responsibilities very seriously and will only set targets that it has a high level of confidence can be achieved.
“Setting science-based targets requires accurate Scope 3 data and this data is currently being compiled under a detailed and complex process.
“The approach being adopted is to follow the Science Based Targets Methodology which is grounded in an objective scientific evaluation of what can be achieved.”
Grafton Group also addressed concerns around gender diversity, saying three of its eight board directors are women (38 per cent).
It said the board has committed to achieving the target set by the FTSE Women Leaders Review of having a minimum of 40% per cent of Board positions held by women by 2025.
But it added that some shareholders have more stringent targets than this.
“The Group seeks where possible to prioritise the appointment of women to leadership positions and is committed to increasing representation of women in senior leadership positions across the Group,” the statement said.
“Grafton has introduced initiatives to provide career development opportunities for female colleagues including participation in management development programmes, mentoring, coaching and flexible working arrangements.”
The firm also addressed shareholder concerns over the number of positions Mr Roney holds elsewhere, saying the nomination committee monitors all directors’ external commitments and would “take appropriate action” over any concerns about their ability to dedicate sufficient time to their roles.
The company said the board believes Mr Roney has “always devoted ample time to his role as chair and that he effectively discharges the functions and obligations of the role”.
It cited Grafton’s response to the pandemic, Mr Roney’s involvement in major strategic decisions in recent years and leading the search for a new chief executive, which led to the appointment of Eric Born in 2022.
“Mr Roney has a distinguished track record in international business, he brings significant experience to the role, provides clear direction and leadership to the board and makes a major contribution to the strategic development of Grafton,” the firm said.
“The board acknowledges Mr Roney’s influential role for the benefit of all stakeholders in the company.”
The statement added that the firm will set out further details on these matters in its 2023 annual report.