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2020 AGM

AGM Investor Q&A – 2020

We are inviting any shareholder who has a question in relation to the 2020 AGM changes announced, the resolutions, the annual accounts and financial statements or the completion of their proxy form to get in touch with us via email.  Please send your emails to and we will respond accordingly. These Q&As will be published below.

Question 1

“I am deeply uncomfortable with the AIC code of governance and in particular the provisions which permit directors to regularly serve more than 9 years.  Shareholders in the VCT sector rely on their board to monitor the performance of the investment manager.  In the event of prolonged poor performance, or a loss of faith in the manager’s ability to provide satisfactory future performance, the board should be able to take the difficult decision to replace the managers.  I believe that this is less likely to happen, and directors are less able to take an objective view, when they have been working closely with the managers for many years, and even worse when the manager’s CEO sits on the board. 

Moreover, a lack of turnover in the board is a barrier to greater diversity of thought and challenge.  I have been a member of various boards and committees over the last 15 years and have always found that the appointment of new board members brings a valuable new perspective and a new energy to boards.  Setting maximum terms of office of 9 years helps to ensure that new board members are regularly brought in.

Please could you explain why you believe your current policies around board reappointments is really in the interests of your shareholders?”

(JL, 02/04/2020)

Response to Q1

“Thank you for submitting your proxy votes for our AGM and for your question.

As you will have seen from the Prospectus at the time that you applied for B shares in Seneca Growth Capital VCT Plc, the Company has had an unusual history and now has two share classes, Ordinary shares and B shares.
The Company was formed in 2001 but circumstances in the early years denied it the opportunity to raise further significant funds. As a result, the Board took responsibility for the management of the original portfolio in 2007.

In 2018, the Company was approached by Seneca Partners, who wished to offer their clients the opportunity to invest in a VCT managed by them. The Board considered that this provided a method by which the running expenses could be shared by shareholders in a larger fund. Your B share portfolio is therefore managed by Seneca on an initial contract which runs for five years, the time that original B shareholders need to hold their shares if they are to continue to benefit from the initial tax relief obtained on subscription. The Ordinary share portfolio is separate and continues to be managed by those Directors in office in 2018 who are still on the Board (Richard Roth and myself).

I understand your comments regarding the length of service of Directors and the AIC code. It is not my intention to prolong my period in office, but I do regard myself as having continuing responsibilities to the Ordinary shareholders for a limited period possibly until the two share classes are merged. Notwithstanding my length of service, I do comply, as Chairman, with the AIC code. Richard Roth was appointed in 2015 and has been closely involved with the change of investment responsibilities. Alex Clarkson was appointed at the end of last year and, on his appointment, we stated that we intend to make further appointments in due course and comply with the recommendations of the Hampton-Alexander Report. Overall, therefore, two Directors have left the Board and three have joined in the last five years.

You also mention that you do not support the Manager’s CEO serving on the Board. This is a widely held view, as is the opposing view that the Board benefits from there being a representative of the Investment Manager on the Board. I subscribe to the latter group since I prefer the Investment Manager to share legal responsibility for the actions of the Board.

I share your view that Boards need continual renewal, but I also believe this should not be at the expense of the Board losing valuable experience too early.

I hope I have explained our policy given the unusual circumstances of our Company and I am sorry that current circumstances will not allow you to attend our AGM and meet the Board to continue the discussion. However, as I referred to in my letter, we do intend to hold a Shareholders’ Forum later in the year, which I hope you will be able to attend.

Yours sincerely,”

John Hustler, Chairman (06/04/2020)