The vote against Top Glove’s INEDs amid migrant workforce woes

“TWO of the world’s biggest investors, Blackrock and Norges Bank Investment Management (NBIM) have voted against the directors of one of the globe’s largest manufacturers of personal protective equipment (PPE) after more than a quarter of its workforce reportedly contracted COVID-19.”

Such was the introduction of the article entitled “Blackrock and NBIM Target Directors at Top Glove (Corp Bhd) over Worker Safeguarding” found in the Responsible Investor website which is accessible via www.responsible-investor.com.

At yesterday’s annual general meeting (AGM) of Top Glove, the pair voted against all directors who are due for re-election, according to Responsible Investor.

The six independent non-executive directors (INEDs) in question are Datuk Lim Han Boon, Datuk Noripah Kamso, Datuk Norma Mansor, Tan Sri Rainer Althoff, Sharmila Sekarajasekaran and Lim Andy.

Californian public pension fund CalSTRS also voted against the six directors but – unlike Blackrock and NBIM – supported the retention of Han Boon.

Blackrock stated in its voting bulletin that the conditions revealed by whistleblowers and investigations by US and Malaysian Government agencies are a “stark contrast to what the board has conveyed to shareholders”.

The US investment giant which holds 1.61% equity stake in Top Glove describes the “board’s ineffectiveness in COVID-19 mitigation and inadequate oversight of worker health and safety issues” as “especially egregious” and stresses the “potentially serious implications for its reputation as a supplier of such equipment to hospitals around the world.”

According to Responsible Investor, Top Glove is the world’s largest manufacturer of rubber gloves – a commodity currently in huge demand – but its treatment of workers has long been a cause of concern.

“The company was added to the UN Global Compact watch list in 2018 amid allegations of forced labour and excessive working hours,” the portal noted.

“In November, it was reported that worker dormitories at the company had become the site of Malaysia’s largest COVID-19 outbreak,” Responsible Investor pointed out.

“Blackrock reports in its voting bulletin that more than 5,000 of Top Glove workers (25% of the workforce) have been infected, with one reported fatality. The outbreak resulted in the 28-day closure of 28 of the company’s 41 factories by the Malaysian Government.”

The portal further noted that Top Glove came under fire again last month after it emerged that a whistleblower had been dismissed in October for sharing pictures of worker conditions.

Top Glove’s willingness to engage is acknowledged by Blackrock, according to Responsible Investor but ultimately, the world’s largest asset manager concludes that:

“Given the gravity of the situation and the material failure in oversight by the board, the Blackrock Investment Stewardship Group (BIS) voted against the re-election of the current members of the board of directors.”

Blackrock added that it intends to “hold other incumbent directors not on ballot at this AGM accountable by voting against their re-election at future shareholder meetings.”

NBIM did not publish its reasons for voting against the directors, added Responsible Investor.

However, it is to note that despite Blackrock and NBIM’s opposition, all six independent directors were re-elected to their positions.

According to Top Glove’s filing to Bursa Malaysia, Lim was re-elected with 72.35% of votes in favour, and 27.66% against.

There were also 15.156% votes against Althoff, 15.79% against Noripah, 15.13% against Norma, 13.73% against Sharmila and 13.45% against Andy. – Jan 7, 2021

Editor’s note: The headline has been amended for better clarity

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