RBS have now sent out the 2019 AGM circular to shareholders. This contains Resolution 28 requiring RBS to establish a Shareholder Committee, which was requisitioned by ShareSoc and UKSA members. If you own RBS shares, please vote for our resolution.

Sadly, the RBS Board will be voting against our resolution and have recommended shareholders to vote against it. Their rationale (which is full of spurious reasons and illogic) is as follows:

The concept of a shareholder committee was included in the Government’s Green paper on Corporate Governance Reform. The Government’s response to the consultation notes that the majority of respondents were opposed to the idea, citing a range of reasons. First, there is the difficulty of finding a group of investors that could represent the views of the many investors holding shares in large quoted companies (c.186,000 in the case of RBS). Concerns also exist that such committees could entrench large investors, making it harder for smaller investors to have a say. Finally, shareholder committees with strategic oversight and advance say on draft pay and nomination proposals would blur the lines between stewardship and executive decision-making, and undermine the unitary board model. The Board shares similar concerns and therefore does not consider that the creation of such a committee would be in the best interests of the Company. It is the role of the Board, directly elected by shareholders, to promote the success of the Company for the benefit of its members as a whole. Shareholders’ views are of course very important and it is considered that established channels including the AGM, the Investor Relations Programme and retail shareholder events already provide appropriate mechanisms for engaging with shareholders. The Board therefore recommends, as it did in 2018, that you vote against Resolution 28. Further details of the Board’s view on Resolution 28 are given in Appendix 1 with the Supporting Statement from the requisitioners given in Appendix 2.


These arguments are basically the same ones they argued last year. We pointed out the spurious points and illogic to RBS in an email on 2 Jan 2019, but they failed to take note of what we said and instead continued in their old failing modus operandi.

Our response to the RBS arguments are:

Re Unitary Board, It won’t undermine the UK’s unitary board model if the shareholder committee is not given any decision making powers by the Board.

Re Majority oppose, ‘Three in ten’ in fact represents tremendous support for the Shareholder Committee idea when consultative responses are numerically dominated by industry members determined to keep the status quo. It is disingenuous of a Government department to misuse statistics in this way in order to kick an idea for which there is strong independent support into the long grass. In general, the dismissal of the Shareholder Committee concept is superficial, illustrating a determination to yield to special interests rather than search for solutions.

Re getting representative members, by definition any committee will only be a sample of the universe, but a suitably stratified sample should ensure Committee members have a broad understanding of the key issues and can give the RBS Board another perspective, which it clearly needs to listen to. The Government’s point may have some validity in respect of a Shareholder Committee with decision making powers, however our proposal does not envisage any decision making powers, so the Government’s point falls away, as does RBS’s misrepresentation of the point.

Re It is the role of the Board, directly elected by shareholders, to promote the success of the Company for the benefit of its members as a whole. We totally agree with this statement. The Shareholder Committee will enhance this.

For more detail, see this blog and comments in the thread

Perhaps, however, the simplest argument in favour of the Shareholder Committee is that the current method of cosy chats between RBS and major shareholders is not working. The latest bad press fiasco over the CEO’s egregious pension illustrates this. RBS does not listen. When it tries to listen, it fails to hear. A Shareholder Committee can only help. It is low cost and low risk. Vote for Resolution 28.

Cliff Weight, ShareSoc Director and RBS Shareholder Committee Campaign Coordinator.

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