UK Individual Shareholders Society

ShareSoc

Home

POLICIES

THE FRAMEWORK FOR INVESTMENT

Successful and profitable investment depends on having an appropriate regulatory and legal framework so that companies can be managed successfully, so that the profits return to investors and not primarily to the company managers or the agents handling your investment, and so that the returns that result are not excessively taxed.

To achieve all of this has resulted in a very complex legal environment (for example, the Companies Act now in effect was the largest  parliamentary bill ever published) and there are layers of Government regulations and rules from other bodies and policies on top of that. Some of these issues can seem very esoteric to the novice investor, or boring or of little account to those who simply want to make money. But they are the key to achieving investment profits.


Unfortunately there are still many things wrong with the UK investment scene. Individual investors are discriminated against in many ways because policies have been determined to a large extent by the views of institutional investors or major public company directors. Alternatively they have been influenced by politicians who have no experience or knowledge of stock market investment, and in some cases who view stock market investors as mere gamblers, or “speculators”, as they phrase it.


We actively promote the views of individual investors in these matters, trying to change the regulatory environment and practices where appropriate, and we respond to public consultations on these matters so that your voice is heard. The three key areas in which we would like to see reform are:


1. Proper enfranchisement of shareholders (nominee accounts to be discouraged) so that shareholder democracy is restored.


2. Reformed corporate governance so that shareholders control companies and not the management. Specifically that shareholder committees appoint the auditors, make directors appointments and set the remuneration of directors.


3. Changes in legislation to protect shareholders rights and enable shareholders to pursue errant companies and directors when necessary.


Our policies on those and other matters have been summarised in our Manifesto. These are the main points:


The oversight of companies should be restored to their owners.


Shareholder democracy should be improved and shareholder rights strengthened.


The legal framework for companies should be changed to improve accountability.


The taxation of investment profits should be reformed to make it more equitable and reduce complexity.


Excessive director pay needs to be restrained.


Direct share ownership should be encouraged.


Investment education needs to be improved.


Information flow to shareholders should be improved, with all shareholders receiving the same information.


Insolvency law should be reformed.


Stock market regulation and enforcement should be improved, especially for the AIM Market.


See the box to the right for how to obtain the full Manifesto document.

TRANSPARENCY

Researching and monitoring companies should not involve looking through a glass darkly.

CONTRIBUTE

Policy is always under development and can also be changed.

Please let us know if you have suggestions for new policies, or comments on existing ones.


THE FULL MANIFESTO


In June 2011 we published our Manifesto that summarises our policies, explains why they are needed and provides more details on specific proposals.


It is contained in this pdf document:  Manifesto (click on link to open).


That document will form the basis of future policy development.





SHAREHOLDER COMMITTEES


In September 2011 we published a note which explains how we suggest shareholder democracy should be improved, specifically in regards to the appointment of directors and their remuneration.


This is contained in this pdf document: Shareholder Committees (click on link to open).

Note: there are comprehensive analyses of what is wrong with the UK financial sector, and what we would like to see done about it based on our Manifesto, in our submissions to the Kay Review and the Executive Remuneration Discussion Paper - these are available from the Consultations page of our web site.


NON-EXECUTIVE DIRECTOR GUIDELINES


The importance of having active and competent Non-Executive Directors (including Chairmen) in public companies cannot be over-emphasised. They make all the difference between the long term success or failure of a business and are essential for protecting the interests of shareholders. In late 2012 we published, in conjunction with First Flight, a document entitled “Chair & Non-Executive Guidelines” which gives recommendations for the recruitment and remuneration of Non-Executive Directors with the objective of improving their quality and performance. It is present in this file: Non_Execs_Code .


DEMATERIALISATION, NOMINEE ACCOUNTS AND SHAREHOLDER RIGHTS


The problems that arise from the disenfranchisement of shareholders and the undermining of shareholder democracy are a key part of our manifesto. A current threat is the “dematerialisation” of paper share certificates where investors are present on the share register of a company and are hence “members” and recognised as such in terms of voting and information rights. We published this note in March 2013 on the subject: Dematerialisation.


Subsequently we launched a campaign on shareholder rights and the nominee system in October 2014 to tackle many of the issues raised. See this web page for more information: Shareholder-Rights .



DIRECTOR REMUNERATION GUIDELINES


In May 2016 we published this document that gives ShareSoc’s guidelines for the remuneration of public company directors: ShareSoc-Remuneration-Guidelines . It attempts to tackle the excessive pay that has become common in public companies and has a particular focus on the pay in smaller companies. It enables ShareSoc Members to easily check whether the pay of directors is within reasonable parameters.


IMPROVING THE AIM MARKET


In June 2016 we launched a campaign to improve the AIM stock market following widespread criticism of the way it operates and the quality of companies that have listed on it (with many subsequently delisting as a result). We give some specific suggestions for reform here: Improving-AIM