As readers may be aware, ShareSoc have requisitioned a resolution for the Royal Bank of Scotland’s (RBS) Annual General Meeting requiring a Shareholder Committee be appointed. Do they need one? The directors of RBS clearly think not.
For those readers who do live or work in London, you may find an article published yesterday (15/2/2017) in the London Evening Standard giving an overview of the major UK banks revealing. The article was written by Simon English and was headlined “End of the great banking bust (apart from RBS)” which he picked out as the one of the four still in deep trouble. To quote: “Even after nine years of losses, we still don’t know if we have hit the bottom of the well”; and: “Chief Executive Ross McEwan has perhaps the worst job in banking. He has been doing it since October 2013, so might soon decide he has had enough”. The punch lines were “Strong points: it can’t get any worse; Bad points: everything”.
Anyone who understands the challenges faced by RBS is likely to agree with those comments and hence it can surely be argued that they need all the help they can get to ensure a sensible strategy supported by all stakeholders. That is one objective of a Shareholder Committee.
It seems though that some public company directors are under the impression that the concept of Shareholder Committees might undermine the unitary board structure used in the UK, or undermine the authority of directors. The ShareSoc proposals do nothing of the kind. This is what our proposed resolution for RBS says: “It is not for the proponents of this initiative to micromanage the Company, and therefore this Resolution is intentionally not prescriptive. It is for the Directors to decide the terms of reference and operational details of the Shareholder Committee in line with this Resolution and to produce proposals for approval by shareholders in due course.”
We made some suggestions in our supporting statement about what influence a Shareholder Committee might have but they were only options for consideration and none were intended to override the ultimate authority of board directors to decide what is in the best interests of the company.
More information on our proposals on Shareholder Committees and RBS are present on this web page: www.sharesoc.org/campaigns/rbs/