23 December 2013

Democracy rules?

by Peter Ewart | Contributor

Democracy comes in many shapes and sizes, many of which are far from perfect. In the wake of last week’s AGM there have been some funny definitions of democracy going around lately.

Last Thursday’s AGM saw all of the Board retain their positions with varying degree of backing between 65% (Brian Stockbridge) and 85% (Graham Wallace) of the votes cast.

The requisitioners race is seemingly run. They have taken around 30% of the vote, but as it stands will take no place on the Board. This is not democracy if your definition is one person one vote. There are private funds and trusts, hedge funds and investment funds involved. Due to the nature of the timing and trading of the investments in Rangers in the past 18 months, the percentage of the votes you have has no direct link to the money you have put into the Club.

However, it is under the rules a properly constituted vote of the shareholders in Rangers International Football Club plc and as such we will have to accept it for now, whether we like the outcome or not.

It is incredibly unusual in a corporate setting that shareholders would give Directors such a bloody nose. 35% against in the case of the Finance Director speaks volumes of the discontent there remains within small shareholders and some IPO institutional investors about the current state of the business. That will surely have been noted by the incoming Chief Executive and Chairman. They will have to take forward a Board that represents all shareholders, something we have been denied to date.

If we take this result as a ‘democracy’ of sorts, then what happens next? Do those who voted against abandon their beliefs and concerns and simply forget about them? No, they don’t. Any ‘democracy’ demands proper checks and balances and proper scrutiny of those in power. Our recent history ably demonstrates the need for proper oversight of the Board and fans should be able to play a role in that. Genuine and credible concerns need to be recognised and acted upon by the new Chief Executive. Nothing less will do. And with the potential to alter the make-up of the Board, fans who own shares can begin to realise what influence they could hold. The overall complexion of the shareholders will change before next year’s AGM. We will see who is here for the short term and who is in for the long term. Further investment in the Club will be needed by then.

I don’t envy the job Wallace has on his hands. He came across as professional and purposeful as he addressed the AGM on Thursday. His announcement of a 120-day plan to address all aspects of the running of the Club is very welcome, although shouldn't have been necessary. It is a damning indictment on his predecessors, some of whom remain on the Board. It will be an absolutely pivotal period for the Club, and his decisions will have consequences that reach far beyond this season. A review of the playing squad, the need for a scouting network and the development of youth were all key themes, and their inclusion are long overdue. Budgets in all aspects of the Club have been out of control in the past 18 months. The playing budget is too high, as was executive remuneration. It is right that we must get a handle on the spending as quickly as possible.

Wallace made a strong play of the discord off the field affecting our ability to attract sponsors. I have no doubt it does. I hope he comes to realise that having a Club where the budgets are a mess, where cash burn rate and spending was out of control will equally put sponsors, and indeed potential investors off. The Finance Director is a key role and one where we have been failed to date. We know there are people willing to put the money in if certain progressive changes are made.

Wallace comes across as professional individual. Let’s hope he will recognise the unprofessional and haphazard output from Media House and Jack Irvine and agree that that should be brought to an end. It has been to the detriment of our Club over successive regimes. We can do so much better.

We can only hope Wallace is given the licence to make the ‘tough decisions’ that he alluded to, and financial sanity is actually implemented, otherwise we really will have learned nothing from our recent past. I can only imagine that is why some of the IPO investors, currently sitting on a 50% loss, made the difference at the AGM and voted this Board back in.

Talk of boycotts is misguided and unhelpful. Above all else in the journey back to the top the team need our support both vocally and financially. Fans have to be involved in a meaningful, even democratic, way. Wallace should be given some time to achieve progress, and in our ‘democracy’ fans will be able to lobby for what they think that progress should look like.