Voce Capital Management has accused Argo Group’s board of “evading responsibility” rather than acting in the best interests of the company and its stakeholders, days after the specialty re/insurer announced it had been issued with a subpoena by The US Securities and Exchange Commission.
After news of the subpoena broke, Argo released a statement explaining that it was conducting an internal review while working with the assistance of outside counsel in order to fully cooperating with the SEC.
The SEC subpoena was concerned with documents primarily related to the company’s “disclosure of certain compensation-related perquisites.”
Now, Voce has called into question the reliability of Argo’s board and stated that shareholders “simply have no reason to trust anything” done by it.
“Why else would the Board choose to use a press release disclosing an SEC investigation – which was prompted by a media story rather than any voluntary act of transparency – to then congratulate itself for the multi-year Board de-staggering process it announced months ago,” reads Voce’s statement.
The 5.8% Argo shareholder added that, should the board continue to refuse the changes it has recommended, it will seek to hold it accountable through whatever process it deems “to be in the best interests of all Argo shareholders.”
This development is the latest chapter in what started as a messy back-and-forth between Argo and its fourth-largest shareholder Voce Capital Management.
The public exchange culminated in the re/insurer announcing plans to introduce a process of phased declassification of the Argo Board of Directors, after which the entire board will stand for election annually.
Another proposal laid out plans to reduce the maximum size of the Board from 13 to 11.
Argo’s board also unanimously approved a series of changes that will see an alteration to the way its executives are compensated.