Minority shareholders for the public-listed National Bank of Malawi on Friday asked the bank to change its corporate governance operations, especially on the selection of the independent board of directors.
This was raised during the bank’s annual general meeting in Blantyre.
According to the articles of association, a shareholder who has more than 10 percent of shares shall be allowed to appoint one director into the board for each 10 percent of the shares and the board should have 13 directors.
According to one of the minority shareholders Frank Harawa, they are not comfortable with how independent non-executive directors are chosen because, according to him, all of them are appointed by two majority shareholders, which are Press Corporation and Old Mutual Malawi.
“That was our concern and they told us that they will look into it though that is just verbal but we hope that we will soon have a representation in the board of National Bank because we also need people who can represent our views,” he said.
According to information which was provided to the shareholders, Press Corporation holds 51.5 percent of shares thereby being entitled to five directors, Old Mutual holds 22.4 percent, thereby being entitled to 2 directors, while members of the public combined have a shareholding of 25.7 percent and not entitled to choosing a director because individual shares do not exceed 10 percent.
The information showed that last four directors are chosen after a thorough process and are recommended by the sitting board of directors.
Responding to the concerns, newly confirmed Board Chairperson Jimmy Lipunga said nothing is wrong with the corporate governance of National Bank and he expressed hope that people will understand.
“Directors represent the interest of shareholders but they are not necessarily agents of the shareholders and shares that are floating in the general public might be 25 percent in totality but appointment of directors never follows that path because it looks at individual shareholding,” he said.
Apart from confirming Lipunga, the shareholders confirmed two other directors who have replaced Elizabeth Mafeni and Bernard Ndau, who resigned.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
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