Debate at AGM
RBS makes concession on shareholder power
Bank has agreed to a debate on a shareholder committee (photo by Terry Murden)
RBS has accepted pressure from private investors to debate and vote on the establishment of a shareholder committee at the May AGM.
A shareholder committee would most likely be advisory in nature. It would have no formal powers but could look at and comment on strategy, governance, executive pay and other high-profile issues.
The proposal needs 75% shareholder support. The Government, via UK Financial Investments, owns 70.48% of RBS and its stance will therefore be critical in deciding the outcome.
ShareSoc director and campaign coordinator Cliff Weight said: “ShareSoc and UKSA have fought for better shareholder engagement and shareholder committees for over 20 years.
“At last our efforts are being recognised. A positive vote at the AGM will be a great step forward for shareholder democracy.”
Mark Northway, ShareSoc chairman, said: “I see this as a great opportunity for RBS to lead the rest of the UK towards better governance. Getting the shareholder resolution on the RBS AGM agenda is a huge step forward in making all UK plcs aware of the importance of individual investors and the need for company Boards to engage more effectively with all shareholders.”
“We are very pleased that RBS has allowed this debate and is willing to consider the benefits of a shareholder committee. The initial role of any new committee is likely to be relatively low key but is likely to extent over time as the benefits of formal shareholder engagement are realised.”
John Hunter, UKSA Chairman, said “This just could be the first step in restoring the rights of beneficial owners. Shareholder rights have been dangerously eroded by the over-dominant behaviour of asset managers and the nominee system which removes ownership rights. I call on all beneficial owners to lobby their fund managers to vote in favour of this resolution.”
RBS has not indicated whether the board will recommend shareholders to vote for or against the resolution.