Carefully reviewing and updating LIC’s governance and shareholder representation is the next step in LIC’s transformation. Just as we did with the share structure, we need to be sure that the governance and representation models are operationally efficient, effective and fit for purpose.
We understand that LIC’s delivery of products and services for its customers takes priority over shareholder issues for many of you. One of the main outcomes from the review is the need to strengthen engagement with shareholders. In particular, the way shareholder input is sought on operational performance and quality, product development, service delivery, and enhancements that need to be made.
B. Appointing a “market maker”
There is a separate resolution for shareholders to vote on in the Notice of Meeting. This resolution is to amend the constitution to enable the Board to appoint a “market maker”, subject to the Minister of Agriculture approving this change. The aim of the “market maker” is to create price stability and additional liquidity through consistent two-way quotes in LIC shares on the NZX.
LIC recognises that due to the restrictions on who may hold LIC’s shares, its stock is more illiquid than other listed companies.
LIC proposes to introduce the option to be able to appoint one or more firms to act as a “market maker”. The role of the “market maker” is solely to provide additional liquidity in LIC shares for those farmers approved to buy and sell shares without the need to wait for another LIC shareholder to trade with.
Please see the 2020 Notice of Meeting for more detail on these proposed changes.
Ultimately it is you – the shareholders as owners – that make LIC a great co-operative. It is vital that your voice and your views are heard and acted upon as we grow and build our co-op in the years to come.
Voting packs for the annual meeting, including detail on the additional shareholder matters, will be sent in the mail.
Additional information can also be found in the links below: