This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

RBS Campaign Update 9 – Progress as at 13/12/2017

  1. If you have not yet joined the campaign you can still do so, please click here to download the forms .
  2. EMAIL 1 sent out on 24 Nov 2017 and 80 new campaign members recruited.
  3. Resolution and Request for discussion finalised. Click here to see them.
  4. EMAIL 2 sent out on 9 Dec 2017 to all campaign members asking them to sign the forms and return them to us. 30 received so far. We need at least 100 to be sure RBS do not reject the resolution and at least 120 to have a margin of safety.
  5. Press release issued on 4 Dec and publicity in Evening Standard RBS in the firing line as ShareSoc renews campaign and the Scottish Herald Royal_Bank_told__Now_is_the_time_to_give_shareholders_more_say
  6. We are talking to RBS and the engagement seems more productive this year and more professional.
    7. We plan to deliver the forms to RBS on 29 Dec to RBS, hopefully with media coverage.
    8. Our rationale for a shareholder committee is as follows:


Shareholder Engagement

The informal nature of current shareholder engagement (cosy chats with selected shareholders behind closed doors) does not work well for the broad shareholder base. It is not clear whether investors are each being told the same story, how information is being spun, or whether complete or only partial information is being given out. Investors will ask different questions during engagement meetings and so may develop different interpretations of what the company is trying to achieve. Ad hoc engagements tend to only occur when a problem arises.

Currently, when a large number of investors are “consulted”, it is difficult to have the same conversation with each investor and the proposal often changes over the process of engagement. Currently, the different views of different investors create a very “messy” backcloth in which to engage.

For example, in relation to remuneration proposals, there is often no clear trail from the initial proposal through to the final version voted on by shareholders.

Voting happens too late in the process. Discussion and voting at the AGM is ineffective, as institutions do not like to vote against the directors’ recommendations. A more professional and systematic process is required.

This impasse can be broken through the introduction of Shareholder Committee.


Benefits of establishing a Shareholder Committee:

  1. Systematic briefings between the company and knowledgeable Shareholder Committee Members.
  2. Shareholder Committee Members will develop good background knowledge, relationships and trust with the company over time.
  3. Shareholder Committee Members will be presented with consistent information and explanations, and members will have a forum for the exchange of questions and views.
  4. Increased transparency.
  5. A Shareholder Committee will report to all shareholders via the annual report, AGM or other route as appropriate.
  6. A Shareholder Committee will focus on governance and strategy issues, and will not interfere with the day-to-day management of the company.
  7. A Shareholder Committee can be established on a purely advisory basis and does not require any specific powers.
  8. A Shareholder Committee might also include workers, customer representatives and other key stakeholders if desired. There is considerable flexibility on how it might operate in practice.
  9. It is unlikely that the cases of BP, BHS and Sports Direct would have occurred if such a committee had existed at those companies. And the problems would surely have been resolved quicker if each had had a Shareholder Committee.

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