The Shareholder activism debate

Real IR November 2005

Real IR teamed up with Citigate Dewe Rogerson, the international financial communications and investor relations consultancy, host a high-level discussion about shareholder activism.

Sarah Wilson, founder and managing director, Manifest

Wison argued that good governance is about passion, rather than process. She said that Manifest has been "particularly impressed by the progress UK plc has made in the last five years in terms of improving its disclosure". But, she added, companies too often "blindly follow" governance recommendations. This, in Wilson's view, has led many companies to leave corporate governance issues to the company secretariat, when they should really be within the remit of the investor relations department.

Should shareholders receive financial incentives to vote at AGMs?

The German government recently proposed that companies offer higher dividends to investors who turn up to annual meetings and exercise their right to vote. Thilo Kusch, head of IR at Deutsche Telekom, liked the idea of incentivised voting, since voting levels on the Continent are sometimes just 20 per cent of the shareholder base.

Others at our lunch were less keen on the proposal. "How would we ensure quality?" asked Sarah Wilson, founder of proxy voting firm, Manifest. "Surely it's better to have a lower number of carefully considered votes than a mass of ill-considered votes."

Other participants were: John Crosse, IR manager O2; Anita Skipper, head of corporate governance, Morley Fund Management; Paul Lee, associate director, governance and engagement, Hermes Investment Management; Deborah Saw, managing director, Citigate Dewe Rogerson; James Agnew, co-head of UK corporate broking, Deutsche Bank; Guy Stainer, head of IR, Wolesey; David Dible, director Citigate Dewe Rogerson; Isabel Vilela, IR manager, Cookson Group.

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