LONDON — Activist investor TCI Fund Management, which is seeking to oust Canadian National’s top management, criticized the railway’s corporate governance practices today after the resignation of one of CN’s board members.
“It has come to our attention that Julie Godin, CN’s youngest female director, resigned from the Board on September 16, 2021 — the same day TCI formally requisitioned a special meeting to replace four Board directors, and the day before CN announced its new strategic plan,” TCI’s Chris Hohn and Ben Walker wrote in a letter to CN. “Her resignation and CN’s failure to publicly disclose it by way of press release raise serious securities and corporate governance issues.”
TCI said the minimal notice CN provided on Sept. 24 was insufficient and is “another example in a long list of corporate governance failures at CN and illustrates why urgent change to the Board and leadership is necessary to put CN back on track.”
CN says it properly notified Canadian regulators through a filing on the SEDI database.
“Ms. Godin resigned from CN’s Board of Directors in order to focus on her expanding role as Co-Chair of the Board and Executive Vice-President, Strategic Planning and Corporate Development of CGI Inc.,” the railway said in a statement. “Her resignation was posted on SEDI and our website in an appropriate and timely manner in accordance with relevant securities law.”
TCI, which holds $4 billion worth of CN shares and is the company’s second-largest investor, ripped CN’s management in a presentation posted to its website and in a scathing letter to the railway’s board earlier this month.
TCI was critical of CN’s pursuit of a merger with Kansas City Southern, as well as CN’s financial underperformance in recent years.
TCI wants former CN Chief Operating Officer Jim Vena to replace CEO JJ Ruest. TCI also wants to add rail experience to the CN board and seeks to replace four directors with Gil Lamphere, a former board member at Illinois Central, CN, and CSX Transportation; former Union Pacific Chief Financial Officer Rob Knight, former CN executive Paul Miller, and former Credit Suisse transportation analyst Allison Landry.
The fund, which says it has the support of other investors, has called for a special meeting of shareholders to consider its call for changes to CN’s management and board.
CN this month announced a “Full Speed Ahead” plan to reduce its operating ratio, cut capital spending, and increase shareholder returns through a combination of earnings growth and share buybacks.
Is there a Canadian law requiring a publicly traded company to issue a press release when someone – officers, or directors – resign? Or maybe TCI is upset because they found out the hard way: researching the SEDI and CNI’s websites instead of their regular various news sources? Sound petty. While TCI was right to contest CNI’s attempt to acquire Kansas City Southern, they have made their point: leave them alone and let them get back to running their railroad.
TCI’s only interest in doing this is to raise the share price so they can cash out and win big gains…it has absolutely nothing to do with the actual operations of the railroad or BoD. Nothing but a smokescreen, unfortunately it appears some of the investment community is blinded by the bright lights of idiocy(aka TCI).