Carlisle Utd chief: inviting fans' group onto top board would have been a "quick fix"

The Carlisle United Official Supporters' Club, a 25.4 per cent shareholder, have long coveted a seat on United's strategic board after indications more than a year ago that their wish was set to be granted.

But the Blues' hierarchy say that, while it is "envisaged" CUOSC will eventually have a place at the top table, it would be a "sticking plaster" without first rewriting shareholders' agreements at the club.

The holding company board are in charge of long-term affairs at Brunton Park, including investment. CUOSC have only ever had a seat on the club's day-to-day operational board despite their significant stake in the holding company.

In response to a series of questions from The Cumberland News , United chief executive Nigel Clibbens said: "I've seen it argued that Holdings would simply invite CUOSC to join the board - a quick and easy solution.

"My response is that circumstances change in football and, when they do, would appointment by invitation give CUOSC the comfort, legal rights and security it needs for the long term as a significant part-owner - or provide the safeguards needed if club ownership changes through new investment, when that invitation could perhaps be withdrawn?

"A quick fix is not in the interests of anyone."

No timescale has, though, been publicly indicated for rewriting the decade-long shareholders' agreement. Clibbens said: "We are on with sorting it, but in a sustainable way rather than with a sticking plaster."

Earlier this week United announced they were "streamlining" both boards in moves apparently designed to help "facilitate" new investment.

It sees Andrew Jenkins, Steven Pattison and Lord Clark leaving the operational board in favour of positions on the holding company board.

Pattison reclaims the holding company seat he had resigned in May last year during the now-aborted Andrew Lapping investment talks.

The holding company now comprises co-owners Jenkins, Pattison and John Nixon along with Lord Clark, while the operational board involves Clibbens, Nixon, Phil King, Suzanne Kidd and CUOSC's Jim Mitchell.

Asked why Lord Clark had been appointed to the holdings board despite not being a shareholder - in contrast to part-owner CUOSC's status - Clibbens said the Labour peer would help "strengthen our governance" in a non-executive capacity.

He added Lord Clark's position did not carry the same legal safeguards CUOSC will be seeking.

The chief executive, meanwhile, denied that the boardroom revamp was linked to directors' debt. Both Jenkins, who United's last accounts showed was owed £980,000, and Nixon, owed £20,000, recently said they would look to convert some of that debt to shares when new investment arrived. Lord Clark is also owed £10,000.

Clibbens said: "The board changes are not connected with the debt position of Lord Clark, or anyone else, and there is no agreement to convert at this moment.

"Nothing can be ruled out in future but changes of that nature would need to be carefully considered as part of the investment-related discussion between CUOSC and the other shareholders in Holdings."

Pattison's invitation to return to the holdings board, Clibbens said, reflected "changing circumstances" which saw the operational board comprised only of those overseeing day-to-day matters, leaving the owners free to concentrate on strategic matters. "This is far simpler and less cumbersome," Clibbens said.

Pattison's return follows a stormy episode at a recent fans' forum where he was challenged over what he "brings to the table".

He responded by launching a thinly-veiled attack on Lapping, claiming he would reveal correspondence that would show the latter "for what he was" - a threat United later effectively withdrew.

Pattison also claimed he would not "blow his own trumpet" but later responded angrily to a supporter who questioned his professionalism by saying: "You want to pick fights, you're picking on the wrong man."

Regarding investment talks, meanwhile, Clibbens said the club had "nothing new to add...be it regarding overseas or other interest" but insisted fans would be updated with any "significant" new information.

The mystery "billionaire" saga is now 521 days old, with United's most recent update claiming further "steps" were intended to follow a recent meeting between the overseas individual and the club hierarchy.

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United's answers in full from chief executive Nigel Clibbens:

Why is Lord Clark now on the Holdings Board despite not being a Holdings Company shareholder - while CUOSC still don't have a seat

Lord Clark was a director of 1921 for a number of years. Now he will be a director of Holdings, but has no shares in Holdings. He is a director on the Holdings Board in a non-executive capacity, a specific role he also performed on the 1921 Board, which strengthens our governance. He was appointed by invitation to join the Holdings Board (and in the same way he could be just as easily removed, as can any invited director). He has no legal right to be a director of 1921 or Holdings. This arrangement is acceptable to him and the company, given his role on the Holdings Board.

CUOSC is a 25% shareholder in Holdings but, as I explained, this does not give an automatic position on the Holdings board. It is recognised that shareholders, especially those with CUOSC’s level of ownership, would anticipate having director representation on the company board making decisions which affect its shareholding. It is also anticipated they would seek to underpin this with defined director rights in legal agreements when they first join the company, rather than rely on informal arrangements and invitations or hope to renegotiate later.

The current legal agreement that determines the CUOSC rights gives a right to be on the 1921 board, but doesn’t give the right to a director position on the Holdings Board, for whatever reason – it dates back 10 years and times do change, so agreements periodically need to catch up and be fixed.

I’ve seen it argued that Holdings could simply invite CUOSC to join its board – a quick and easy solution. My response is that circumstances change in football and, when they do, would appointment by invitation give CUOSC the comfort, legal rights and security it needs for the long term as a significant part owner? Or provide the safeguards needed if club ownership changes through new investment, when that invitation could perhaps be withdrawn? Would a quick fix give the other shareholders the comfort they need for the long term? Or work for a new investor? A quick fix is not in the interests of anyone.

We are already working to bring the shareholder agreement up to date to sort this out. Perhaps it’s overdue, but there is a will and impetus to deal with it now from all, so we are on with sorting it, but in a sustainable way rather than with a sticking plaster.

Is Lord Clark's holding company position intended to be followed by conversion of his debt?

The board changes are not connected with the debt position of Lord Clark, or anyone else, and there is no agreement to convert at this moment. Nothing can be ruled out in future, but changes of that nature would need to be carefully considered as part of the investment related discussion between CUOSC, and the other shareholders in Holdings, looking long term and at the implications for future investment.

Will John Nixon and Andrew Jenkins also be converting their debt?

Same position as above.

Are there investment talks ongoing with parties separate to the overseas individual?

We have nothing new to add at the moment regarding investment, be it regarding overseas or other interest. We will continue to update supporters with any significant new information.

Why in particular has Steven Pattison moved from 1921 to the holding company board, having resigned from the latter last year?

The change last year fitted the circumstances of the time but, as I pointed out, circumstances do change.

That has now been overtaken by a new approach which has been set by the Holdings board, and which I have been recruited to lead, and am implementing across the Club.

The board reorganisation is part of that and sees a new streamlined 1921 board now holding specific responsibility for the operational day-to-day direction and management of the Club – such as managing the commercial operations, retail, ticketing, football and academy; fewer directors, each director having their own operational duties, and executive management roles being held to account by Holdings.

This means Holdings will now be free to deal with matters affecting the shareholders via a board comprising solely of owners and a non-executive director. This is far simpler and less cumbersome. Steven Pattison is a shareholder in Holdings and it is therefore appropriate for Steven to join the board comprising the owners, as it is envisaged CUOSC will, in the new structure.

As I explained previously, it is recognised that shareholders would anticipate having director representation on the company board making decisions which affect their shareholding. There is no legal right to the position. In that regard, the formal position faced by Steven is similar to CUOSC. However, Steven’s appointment is by invitation.

Clibbens also said: “Shareholdings and director positions on boards of directors are not automatically linked in business or football. In practice there is a connection, of course, but it’s not as simple as shareholders become directors, or vice-versa!

"Generally, shareholders and directors choose to organise their company and its boards in a way that is most appropriate for their own specific circumstances. There are lots of different ways and lots to decide during this process.

"For instance: Who are the directors? What do they do? How are they appointed? What rights do they have? The Board arrangements can be relatively informal, or determined by a legal agreement, or a mixture. The situation at Carlisle United is no different.

"To be a director in a company there is no requirement to also be a shareholder. For instance, none of the current directors in 1921 are shareholders of that company.

"Equally, being a shareholder in a company does not automatically give rights to be a director either. CUOSC has been a shareholder in Holdings, but not a director of that company for 10 years.

"In practice, the appointment as a director comes by invitation, or by legal agreement, which give the right to be a director. This is what we have at the Club with both the Holdings and 1921 boards. Only CUOSC has a legal right to be a director, but only in 1921. All the other directors are appointed by invitation."