Over 100 shareholders have again requisitioned a resolution calling on the Royal Bank of Scotland (RBS) to establish a shareholder committee in a campaign organised by private investor groups – the UK Individual Shareholders Society (ShareSoc) and the UK Shareholders Association (UKSA).
The resolution and requisition forms from 161 shareholders were delivered to the RBS’s London offices by Sharesoc director Cliff Weight at the end of December. Weight, who is also a non-executive director of Manifest, has coordinated the campaign on behalf of the investor groups. RBS will now make a decision whether they allow the resolution to be put forward at its AGM in May.
This is the second year of the campaign. Last year RBS rejected the proposed resolution citing concerns about the way it was drafted and legal issues. However, Weight said that the resolution proposed this year had addressed these issues. RBS officials met with Weight following the rejection of the earlier resolution last year.
Weight said: “This year, we are hoping RBS will engage with us and work constructively in developing an improved corporate governance framework. Since ShareSoc first engaged with RBS in December 2016, there have been several positive developments which we recognise and applaud, but there remains much more to be done on shareholder democracy”.
ShareSoc is an advocate of shareholder committees as a way of improving corporate governance at all listed companies and believes that RBS, a bank that had to be bailed out during the 2008 financial crisis, should now be an example to other firms. RBS has continuing governance concerns, ShareSoc said, around its board composition and executive pay as well as the business failings from which it is still recovering.
Mark Northway, ShareSoc chairman said: “Shareholders, including individuals, deserve a new approach; one with greater involvement and more effective input from them as ultimate owners. RBS, given its incredibly poor track record and consequent taxpayer support, should now be leading from the front in governance matters.”
ShareSoc stated that the informal nature of current shareholder engagement did not work well for the broad shareholder base. It believes that it is not clear whether investors are each being told the same story, how information is being spun, or whether the complete or only partial information is being given out.
The establishment of a shareholder committee, ShareSoc believes, would create a better framework for investor engagement. There could be systematic briefings between the company and knowledgeable shareholder committee members, ShareSoc said. These committee members would be presented with consistent information and explanations, and members will have a forum for the exchange of questions and views and could report to all shareholders via the annual report, AGM or another route as appropriate.Last Updated: 5 January 2018