Investors unite to confront Vodafone

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Top investors in Vodafone are meeting next week to thrash out their concerns about the mobile telecommunications group to form a common front to take their grievances to the board.

Several shareholders told the Financial Times they were concerned the boardroom disputes had frayed communications between directors and investors and may have tilted the balance of power towards Arun Sarin, Vodafone’s chief executive.

They were impatient for Sir John Bond, the incoming chairman, to get to grips with investor concerns. The former executive chairman of HSBC, who stepped down last month, takes over from Lord MacLaurin of Knebworth on July 25.

The Association of British Insurers meeting on Monday represents 15 of the UK’s top investment groups and includes many Vodafone investors.

One possibility is that the committee may write to Sir John, setting out its concerns and proposals – though this would require a consensus over the nature of Vodafone’s problems.

Vodafone’s critics want Sir John to “play a strong role to ensure the balance is right” between independent directors and executives on its board, and to “knock heads together”, according to one person due to attend the meeting.

The company has faced disquiet from shareholders since the start of the year when Mr Sarin admitted it was entering an era of lower growth. The last few weeks have seen another bout of boardroom turmoil which culminated in the departure of Penny Hughes, former remuneration committee head, and Paul Hazen, the senior independent director. Last month it announced a new structure and strategy that backed away from its former global ambitions to concentrate on restoring growth to core markets.

At the same time Vodafone reported a record pre-tax loss of £14.9bn for 2006, caused primarily by a £23.5bn write-down of assets bought at the peak of the telecoms bubble in 2000.

Monday’s meeting follows a series of one-to-one meetings over the past two weeks between shareholders and the company.

A few shareholders have also grilled Vodafone’s board about its remuneration policy and plans to reduce the earnings growth targets for executive bonuses “in line with lower growth prospects for the sector overall”.

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