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.

Vanguard backing shareholder committees

According to a report in the Financial Times this morning, Vanguard is to promote the idea of “shareholder liaison committees” to improve corporate governance. This is of particular significance because Vanguard is one of the largest investment groups in the world and overtook Pimco last year to become the second largest fund manager.  Vanguard primarily runs low cost index tracker funds and therefore has to hold all major companies. Indeed they are one of the largest holders of shares in many American companies.

Shareholder committees are something that ShareSoc has promoted also as a step towards better corporate governance and more engagement between shareholders and the directors of companies. See the note downloadable from this web page for how we suggested they might work: www.sharesoc.org/about-us/policies/

Bill McNabb, CEO of Vanguard, was quoted as saying: “Independent directors are doing a good job but we find they are not as engaged with shareholders as they should be”. He also complained that many independent directors had never met an investor.

The recent example of  BG Group in the UK and their proposals for the pay of the new CEO are surely an example of how there is little dialogue in reality despite the common claims that “major investors have been consulted”. Shareholder committees would be a way to tackle that problem.

Roger Lawson

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get more stuff

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.

Other Blog Posts