THE SHAREHOLDERS ASSOCIATION THAT LOST ITS HEAD
By
Mickey Blue Eyes.

“I was to learn later in life that we tend to meet any new situation by reorganising; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation.”
PETRONIUS ARBITER – 210 B.C.

The Shareholders Association holds its Annual General Meeting at 7.30 on Tuesday, 1st June 2004 at the Alex Young Suite, Goodison Park. I will be in attendance but will not support any of the existing officers or committee members if they stand for re-election. Here’s why.

Last June I voted for wholesale changes in the Shareholders Association executive committee and officers. This was the right thing to do and in the same circumstances I wouldn’t hesitate to take similar action. The incumbents had grown far too complacent and inactive and took too much for granted. Regrettably, they had to go. You can find my thoughts at the time here.

Amongst other things I said this:

“If the new officers and committee don’t deliver they will deserve to lose as much as the previous lot did. We should be as critical of the new as the old.”

The “new lot” have not delivered except (thanks to secretary Nick Williams and treasurer Mark Edwards) in day-to-day administrative matters. In my opinion the “new lot” in some respects have abrogated their responsibilities and made matters worse. Therefore criticism is due with a recap of events.

At the time of writing the officers and executive committee are:

Steve Allinson (Acting Chairman).
Anne Asquith (Acting Vice Chairman).
Nick Williams (Secretary).
Mark Edwards (Treasurer).
Colm Kavanagh.
Pauline Laughan.
Ian MacDonald.
Andrew Morris.
John Murren.
Michael Owen.
Julia Sykes.

During the last year resignations were made by chairman John Sinnott and committee members Rob Evans on Monday 1st March 2004, and by Jeanne Healey after the club AGM in October 2003 when she was unhappy at a shares sales leaflet issued by Steve Allinson at the AGM. The leaflet said it was a “private effort” but maintained it was made through the Shareholders Association. In fact no effort had been made to obtain the approval of the Association membership for such a proposition.

John Sinnott said he resigned for the following reasons:

“1. As a matter of principle I am not prepared to chair an organisation where the vice chairman has clear conflict of interest which involved Everton Football Club share transactions through his private company.

2. Where the vice chairman could not give an assurance he had not or would not sell Everton shares at a higher price than he paid.

3. Where the vice chairman has led the Shareholders Association into unnecessary confrontation with the club and is reducing the role of the Association to ‘shouting from the sidelines’ – all without proper consultation with its members.

4. Where the desirable aim of more Evertonians holding shares has been taken backwards by the vice chairman’s application of schoolboy economics in his rights issue proposal.”

Rob Evans resigned at the same time citing dissatisfaction with a press release made in December 2003. Rob had this recorded in the meeting of Monday, 19th January, 2004.

The press release concerned a proposed rights issue, a so-called “personal initiative” by Steve Allinson even though it mentioned the Shareholders Association no less than five times in the text, and even though the subject had been discussed with the club via the previous officers and committee of the Shareholders Association but had not been developed to any practical level. According to both parties the press release was composed by Michael Owen in consultation with Steve Allinson. Neither have explained why they did not discuss the release with any of the officers or committee members. Subsequently Michael Owen said he issued the press release on his own initiative.

Up to now it would appear the so-called “personal initiative” was nothing more than a verbal suggestion to Bill Kenwright and Paul Gregg. Nobody I know has seen any substantial written proposal. Which of course it would have to be to be taken seriously at a commercial level. No businessman worth his salt would consider anything until it was put in writing and in comprehensive detail at that.

Whatever the truth of any of this we had a situation where apparently the chairman and the vice chairman of the Shareholders Association had conducted early meetings with owners Paul Gregg and Bill Kenwright – and then the vice chairman claimed a “personal initiative” which he expressed in a press release………… which then somehow got issued without his knowledge!

Of course this is a scarcely-credible shambles. It smacks too of the kind of disingenuousness deplored in self-styled “spin doctors.” It certainly isn’t what I voted for nor do I support it. John Sinnott and Rob Evans were right to resign. Had Steve Allinson and Michael Owen had any regard for the Shareholders Association both of them would have resigned too. I asked them both to do so, face-to-face and by e-mail. Steve Allinson said he wouldn’t. Michael Owen said he would, but didn’t.

To expand further, during the three months between December and March John Sinnott drew the matter to the attention of the committee, as he was obliged to do. He explained the meaning of “conflict of interest.” He asked Steve Allinson to “consider his position.” The committee and its officers discussed it and did nothing more. In my opinion they failed to take the proper course. In my opinion they should have enforced the resignations of Steve Allinson and Michael Owen. Therefore the whole lot should go, just as the previous lot went. On this most important issue before the club the Shareholders Association officers and committee have behaved incompetently and without due regard for the credibility of the Association.

The “conflict of interest” allegation could be taken care of in an instant if Steve Allinson would answer the following questions:

1. How many shares has he bought and sold during, say, the last four years?

2. Who were they bought from and sold to?

3. What was the price of purchase and the price of subsequent sale of each?

4. What costs were incurred during purchase and sale of each?

This will allow us to calculate profits, if any, by straightforward calculation. The amount of profit, if any, will enable everyone to make their own judgement of the situation. These questions, quite normal where there is any allegation, were asked in committee by John Sinnott – as chairman he was bound to do so after it was drawn to his attention – and others and remain unanswered. Yet still the committee and officers have not followed them up in any substantial way.

In addition Steve Allinson has failed to say why he, at the very least, allowed his name to be used in a press release which went directly against proposed and agreed actions by the Shareholders Association, and why he failed to repudiate it when the opportunity presented itself. He has also failed to explain how the specific proposals of the press release were developed in the first place and if they were communicated at all to the Association Working Party for inclusion in their final recommendations. So –

1. If they weren’t, what was his purpose in denying them?

2. Why did he not contact ANY member of the committee before the press release was issued?

3. Indeed, if he was bent on a so-called “personal initiative” what was the point of his membership in the Association at all, let alone as vice chairman?

4. Isn’t this the kind of action the self-named “Reform Group” was founded specifically TO AVOID?

5. How can this kind of action other than reflect badly on the Shareholders Association?

In fact matters have got worse. A memo titled “Guidelines for Shareholder Executive” dated 8th March (a week after the resignations of John Sinnott and Rob Evans) from the then vice chairman says this for the method of recording minutes of meetings, emphasis added:

- “Reflect the views of the Committee as a whole ONLY. There is a strong presumption that the methods employed to reach decisions; the conflicting views of any members; and the actual vote tally will NOT be disclosed. Reasonable exceptions to this presumption may be where the vote is either unanimous or decided by the Chairman’s casting vote.

- Protect the Committee from misrepresentation. There is a strong presumption that individual members will NOT expect their individual views to be recorded as a matter of course and that this will in any event require the agreement of the Chairman.”

You don’t need an MBA to see how this flies in the face of democratic practice and supposed transparency. Also, bear in mind minutes are the only formal record members can consult for what is being done in their name.

Make up your own mind concerning the definition of “strong presumption” and who is making said presumption. Or even if the wordage is taken direct from a first year text book on administration. So much for having your say and having it recorded, let alone informing the membership of how much dissension there may or may not be. In fact no strong willed individual would accept such a diktat. Anybody who feels sufficiently strongly can have their view recorded, just as anybody who feels sufficiently strongly should resign. So much for an improvement in the Shareholders Association.

Interesting too, that phrase “Reflect the views of the Committee ONLY.” Straightfaced, one is prompted to ask, “What need for ‘personal initiatives,’ then?”

That last question also prompts an even deeper sense of irony when you consider the second paragraph of the same document, emphasis again added:

2. “The Chairman’s primary aim is to be the facilitator - there to put a framework to meetings and forums, guide them out of never-ending discussion, and be consistent and impartial in letting the views of the members coalesce into clear action. They should seek to gain the confidence of all the members by their ability to draw each of them into conference and feel they all play a part in establishing direction. They should seek to do all this while clearly adhering to the constitution, rules and principles of the organisation.”

Given the circumstances this is comedy of the highest order since the officers and committee originally deferred the draft constitution so ably put together by John Sinnott. One can only hope when this is finally assembled it will carefully define the terms “conflict of interest” and “personal initiative” and what their limits are for officers and committee members. Of course this should also apply to disclosure of shares dealing. Also, one recalls with more than a little whimsy that nobody else was “drawn into conference” or “played a part” in the composition and issue of the benighted press release. So much for consistency.

The whole sad, sorry episode is a perfect illustration of how not to do things, that replacement of one moribund group is not improved if the replacements are equally misguided but in a different direction. When it stood for election the Reform Group promised the following:

· Increase Shareholders Association membership to 50% of all shareholders within one year.
· Seek to foster and develop the skills and resources of the membership of the Association for the benefit of the Company (Everton Football Club).
· Create the post of Shareholders Association Supporter Liaison Officer.
· Review the Shareholders Association aims and performance.
· Review the Shareholders Association constitution.

They have failed on the first and third aims, provided no visible evidence of the second except for one forum, and it took a full year to make any advance on the final item. In June last year the Association membership numbered 262. At the time of writing it stands at 267. All the members have seen is eight minutes of meetings, one forum and one annual dinner. As a result of the forum Joe Beardwood was invited to liaise with the club on marketing but even this has been curtailed because of the débacle over the press release. Quite rightly the club dissociated itself from that nonsense and didn’t attend the Shareholders’ annual dinner. However good, bad or indifferent the present club régime might be they weren’t stupid enough to endorse a ludicrously amateurish propaganda stunt. Nobody in their right senses would.

Each Shareholders Association member will have received by now a communication from Nick Williams dated 12th May. It included minutes of executive committee meeting held on 8th and 22nd March, Working Party document on ticketing, Summary of a Fans Forum, a draft constitution and a Notice of AGM. Strangely, the first two documents took five weeks to compose and issue; this is the period immediately following John Sinnott’s resignation. So even the substantial improvements in administration matters faltered badly. The draft constitution differs little from the first attempt by John Sinnott.

*The principle of COLLECTIVE RESPONSIBILITY implies the resignation of all committee members and officers because of the acute importance of the main issues. To reiterate, these are the questions concerning the so-called “personal initiative” rights issue/press release and alleged conflict of interest. I am aware there was at least a measure of unease by some members. But in my view these questions are so serious and fundamental to operation of the Association their failure to ensure resignation of Steve Allinson and Michael Owen means they should have “walked” at the appropriate time. That is the principle generally applied to ministers in government and (supposedly) to company boards of directors around the world, or in fact for any organised group of serious intent. It is there to allow for individual acts of conscience or acute disagreement.

In summary – administrative matters aside – the executive committee and officers of the Shareholders Association during 2003-2004 failed the first substantial test of their abilities and badly let down the membership at a time when they needed to demonstrate the new approach they were elected for. In my view they took one step forward and two back. There was an opportunity to improve matters greatly and they missed it by some distance. The Association could have been at the heart of the great and inevitable changes which will take place at the club during the Summer. Instead, it has been politely marginalized.

That is my position now and at the AGM next Tuesday.(28/05/04)

* This paragraph was added on 30/05/04

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