The Financial Times reported on Saturday that U.S. investor Steven Wood has accused the Swatch Group of “worst-in-class governance,” suggesting changes to the board and governance reforms for the Swiss watchmaker.
The newspaper stated that the founder of GreenWood Investors, Wood, which holds approximately 0.5 percent of Swatch’s share capital, has abandoned plans to acquire a board seat and is nudging the board to implement a set of reforms.
Therefore, Swatch and GreenWood did not respond immediately to Reuters requests for comment.
Wood informed FT that “I no longer think of the primary goal as going on the board and having a constructive relationship. These are new moves to force them to evolve their worst-in-class governance.”
The GreenWood investors offered six proposals to change Swatch’s corporate governance, one of which was to enable so-called bearer shareholders to elect three representatives to the board on Monday.
However, the bearer shareholders are those who own a majority of the share capital of the firm but not the voting rights.
Wood was unsuccessful in a bid to obtain a seat on the firm’s board in May, as a bearer shareholder representative, meeting resistance from the Hayek family, which owns over 44 percent of voting rights and a smaller chunk of the share capital.
Swatch’s board advised that the bid of Wood should be rejected, and the company asserted that 79.2 percent of the shareholders voted against his election during the annual general meeting.
With its plastic watches and luxury brands such as Tissot, Longines, and Omega, Swatch recognizes the right of bearer shareholders to representation but disagrees with the way it should be elected.
Wood has been urging Swatch to place more emphasis on its luxury brands like Breguet and Blancpain in an effort to reverse the fortunes of the Swiss company, whose shares have fallen by about half since early 2023.
