Despite what some may think, SEC filings are generally informative and even occasionally entertaining. Thanks to a tip from our colleague, Daniel Rohr, a senior analyst at Morningstar, we can share an entertaining nugget from a new annual report, as well as report on what may be a new trend in corporate governance circles.
The 2011 annual report (pdf) was filed recently by Anglo American plc (AAL:London), a huge mining company that has a market cap of nearly $31 billion and boasted an $11.1 billion operating profit last year – an increase of 14% over the prior year. Anglo American has operations around the globe that involve extracting diamonds, platinum, coal, nickel, copper, and more. But here’s the part that we’d frankly never seen before:
“As part of our commitment to best practice and innovation, iPads were introduced in 2010 for the review of board papers, ensuring fast and timely provision of information to directors whilst at the same time reducing the environmental and financial impacts of board meetings. The majority of the directors use the iPads for reviewing their board papers.”
Sure, we get the fact that the company can pick up an iPad with Wi-Fi and 4G for $829 or less (data plan sold separately), but we don’t find the argument that the iPads were bought to deliver the information quickly and reduce paper very persuasive. Are to we believe that none of the directors already had laptops? Are the board papers formatted in some strange way that they can only be transmitted to an iPad, and not to any other type of computer? We doubt it. It might be more intellectually honest to simply admit: “Hey, iPads are cool. Everyone else has one. We’re going to buy a bunch for our directors so that they’re cool, too.”
Veteran footnoted readers may recall that iPads have been popping up in SEC filings for a while now, but those references (some of which are here, here, and here) were in the context of departing executives negotiating to keep their company-issued iPads even though they were leaving their employers. Expanding the practice of getting iPads for directors seemed new, so naturally we wanted to know if any other companies were jumping on the bandwagon.
We found one other company – so far – that has done so. In the case of First Financial Northwest, Inc. (FFNW), the switch to iPads for directors seems to have been controversial, a small part of a larger dispute between Chairman, President, and CEO Victor Karpiak and the Stilwell Group’s representative, Spencer L. Schneider, whose four-month quest to become a director ended with his abrupt and angry resignation in mid-February. In the PRER 14A that First Financial filed on April 4, the filing states:
On February 10, 2012, Mr. Schneider asked when he could expect the board packet for the February 15, 2012 meeting and requested that the materials be delivered via overnight mail for Saturday delivery. Mr. Karpiak’s assistant emailed Mr. Schneider that Board materials would now be provided to Board members electronically through iPads supplied by First Financial. Mr. Schneider told Mr. Karpiak this is repulsive. Mr. Schneider requested the minutes from the Board meeting that approved the iPads. Mr. Schneider and Company Counsel had an email exchange regarding the need for the iPads.”
But back to Anglo American. The directors’ iPads even got a nod on the company’s web page about good corporate governance, with a note that the iPads were purchased following a “2010 board effectiveness review.” Based on the “Action plan update 2011,” though, it sounds like some – but not all – of the directors are on board with the iPad’s high-tech capabilities. The company’s assessment states:
“Successful implementation with a high percentage choosing electronic over paper copies.”
Maybe they’ll have better luck with directors embracing their iPads fully in 2012. Or hey, maybe the hold-outs are waiting for an upgrade to the new iPad HD, so they can be more effective still.