In the next little while you may hear of news of issues with the...

In the next little while you may hear of news of issues with the chairmen or members of the board.

I ask the current shareholders and market not to take it as a negative.

Remember that there are 2 things that affect the management of a publicly listed company. The management team and the board of directors that hire them. The board has great influence of the management. Sometimes they hire a management team to do what their good at (a hired gun), which one would hope to increase shareholder value.

The other times they hire a management team to do as the board feels the company should be run. I think this is the case here and you can see how the board cares about shareholder value. They don't care, as they don't own shares and their year's salaries are close to their share ownership.

I'm at a lost as to why the larger shareholders aren't more pro-active.

So, if there is movement by the board in the near future and it appears to be negative. Please try to realizes this is a good thing. As soon as the chairmen and possibly other board members are removed. New ones with more common sense will replace them. Their first task will be to increase shareholder value.

Remember...that's what the board is LEGALLY there for. No to make money or grow the business (even though that's what they normally do...which is fine.) There only job is to increase shareholder value...if they don't...they are breaking the law.

I now believe that the correct magnifying glass is now looking at the actions of the board...or should I say...lack of action.
And that action as a positive.

A new chairman and board would certainly look at the following...

-At 95 cents the board (NOT management) didn't feel that a stock buy-back offered value. A new board would value Codan a lot more and start buying back stock to reward shareholders and increase shareholder value. It's simple math.

-The current yield is 5.3%. The company has lots of cash...low debt (they'll have paid even more off by now) and should grow profits at 20-30+% every year. The new board would increase the dividend to 2.5 cents at least and even 3 cents. That would show the market the board believes in the company and attract new investors.

-Tell the market via the ASX...about things the company is doing that are increasing shareholder value. The current board is HIDING information and news. I've found...as you can too via a simple Google search 14 important news events in 12 months that should have been released to the market. Why isn't the board telling the management team to tell the market?

-Go to the market...do roadshows to the fund houses and show them why Codan is worth buying. Fund managers have questions...with senior management in their face they'd be more willing to invest after they hear the answers. By bringing on a large new shareholder...that shareholder will demand more action. The AGM was sad on a few levels.

-Many fund managers look at boards and management that are pro-active. They can also tell the ones that are lazy and going through the motions to collect a fat salary. A new board would show up on many fund managers radar very quick. Codan screams value. If you bought the company out today and it grew at the same rate...you'd got the company for free in 5-6 years. The current P.E is 9!!!!

Don't be alarmed if you see board movement in the near future.
A shake up is needed and welcomed.
It's a positive and a buying opportunity.