In the lead up to the 2019 AGM, the Company undertook initial consultation with major shareholders and received a variety of feedback on both the Resolution and the Company’s approach to engagement with regulators and policymakers including political parties and governments.
Following the AGM, the Board of Directors initiated further engagement to facilitate a clear understanding of the reasons underpinning the votes cast against the Resolution. This included writing to the Company’s largest shareholders and offering to discuss how the Company proposed to respond to points raised during the initial consultation and policy on stakeholder engagement. The Company is grateful to those shareholders that provided feedback at that time.
The Company regularly engages with regulators and policymakers in the UK, Europe and USA (including those associated with political parties and governments) to understand and contribute to discussions on a wide range of matters which are associated with our business and delivering increased value to our shareholders. This approach is detailed on pages 32 and 33 of the 2018 Annual Report as a fundamental aspect of our stakeholder engagement. Political and regulatory risk has been identified by the Board as one of the nine principal risks that the business faces. Activities of this nature are not designed to support any political party or to influence public support for a particular party and would not be thought of as political donations in the ordinary sense of those words.
Reflecting the feedback received from shareholders, it has been determined that within future Annual Reports additional disclosure will be provided. This will describe the forms of engagement that have taken place with regulators and policymakers in the financial year as well as additional disclosure regarding the oversight of that engagement. To assure shareholders of the governance associated with managing engagement and transparency, the Company has also developed and published a policy explaining how stakeholder engagement is undertaken, including oversight and associated reporting.
The term ‘political donation’ is widely defined in the Companies Act 2006 (“the Act”). For clarity, the Company has not made, and does not intend to knowingly make, political donations. The Company continues to believe it is in the best interests of the business and shareholders to renew the authority most recently granted at the 2019 AGM to avoid any inadvertent infringement of the Act.
Prior to 2019, the Company had proposed an authority to spend up to £50,000 under each of the three categories covered by the Act. At the 2019 AGM, Drax sought an authority to spend up to £100,000 under the same three categories which was approved by a majority of shareholders.Nonetheless and reflecting feedback received in connection with the Resolution, at the 2020 and future AGMs the Company will propose an authority to spend up to £100,000 in each of the three categories but will introduce an aggregate cap of £125,000.
Further explanation on these matters, and our ongoing engagement with shareholders, will be included in the 2019 Annual Report and notice of the 2020 AGM.
Drax Investor Relations: Mark Strafford
+44 (0) 1757 612 491
Drax External Communications: Matt Willey
+44 (0) 1757 612 285