(June 19): Manchester United plc has faced criticism by an influential proxy advisory firm over its allegedly weak corporate governance, including limited board independence and the absence of a nominating committee.
Institutional Shareholder Services (ISS), which advises on shareholder ballots, recommended that investors vote against 10 of the English football club’s 12 directors at its June 10 annual general meeting. Only two of the directors were considered independent by ISS, according to a copy of the report obtained by Bloomberg.
According to analysis of data compiled by Bloomberg, that places the company among the lowest-ranked New York Stock Exchange-listed companies on board independence and below the vast majority of more than 14,000 tracked companies. ISS supported the re-election of Robert Leitão and John Hooks, but urged shareholders to oppose the remaining non-independent directors, including six members of the Glazer family.
The AGM’s outcome remains unclear because Manchester United does not publish the results of shareholder votes. Another shareholder advisory firm, Glass Lewis, noted the company failed to disclose a detailed record of the proxy voting results from its last meeting. “Such disclosure is a fundamental shareholder right,” it said in a separate report also seen by Bloomberg.
Manchester United didn’t provide a comment on the matter. ISS and Glass Lewis declined to add anything to the information in each of their reports.
The company’s shares are listed on the NYSE. The shares are divided into two classes: Class A, which carry one vote per share, and Class B, which carry 10 votes per share. The Glazers own around 67.9% of the voting rights, while Ineos Ltd, owned by billionaire Jim Ratcliffe, has 28.9%, according to Manchester United’s website. Minority shareholders don’t have a meaningful vote.
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Board independence is widely regarded as a central principle of public-company governance. However, sports teams are almost always closely held organisations and are rarely publicly listed.
Family ownership
ISS’s opposition to most of the board highlights the tension between Manchester United’s public-market listing and its continued control by the Glazer family. While the company has access to public equity markets through its NYSE listing, its governance arrangements remain heavily shaped by family ownership and limited independent oversight.
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ISS also raised questions about the structure of key board committees. Leitão, one of the two independent directors, chairs Manchester United’s audit committee. He is also managing partner of Rothschild & Co Gestion, the top holding company of the Rothschild & Co Group, and co-chairman of the Rothschild & Co Group Executive Committee.
Rothschild & Co advised the Glazer family in connection with the sale of shares in Manchester United to Ineos, according to a company filing with the Securities and Exchange Commission cited in the governance critique.
Glass Lewis said that the audit committee, with just two members, is too small. A committee with responsibilities as crucial as the audit committee should have a minimum of three members to perform its function to shareholder satisfaction, it said in its report.
Manchester United’s compensation committee should be entirely independent, in line with governance best practice, said ISS. It also criticised Manchester United for not having a nominating committee, arguing that such a body would improve accountability for board appointments and increase transparency and communication with shareholders.
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