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Long term Barclays’ shareholders who took up the Open Offer of 2008 will remember bitterly the board’s broken promises, explicitly stated in the Q & A leaflet issued at the time, that not only would it “maintain its current dividend policy” but the new shares would qualify for the next dividend to be paid. Ever since then it has been evident that the bank’s shareholders, its nominal owners, count for very little indeed by comparison with the hunger of its executives for their bonuses.
Judging by bonuses awarded, year after year, Barclays has been a successful business, but you wouldn’t know that as a shareholder. Prior to that Open Offer, the bank paid a full year dividend of 34p. Five years later, it will be just 6.5p, representing lost earnings of 27.5p a share, or four fifths.
The UK Shareholders’ Association has written to Sir David Walker, the retiring Barclays’ chairman, to ask for a public explanation, in advance of the next AGM, how his board has met its legal obligation to “promote the success of the company for the benefit of its members (ie the shareholders) as a whole.” Our letter can be found here and we hope in due course to be able to publish his reply.
As the UK’s principal organisation representing the interests of individual shareholders, we play an active role in seeking to influence government and the various regulatory bodies on matters which affect those interests. It is a feature of the strength of our membership that we are able to draw upon considerable experience, professional as well as investment, to ‘punch above our weight’.
Over the past two years, this activity has included close co-operation with a ‘coalition’ of pension funds and other institutional long term investors whose interests are, broadly speaking, aligned with ours. This co-operation has given us a stronger voice on accounting and auditing matters, in an endeavour to ensure that the serious errors which led to the banking crisis and failure or near failure of other companies do not occur again.
Most recently, we have joined others to send a strong message to the Financial Reporting Council, responsible for the Corporate Governance Code, that its proposed weakening of the ‘going concern’ assurances currently required of company directors is not acceptable. A copy of the letter may be found Here
The UK Shareholders’ Association welcomes as members investors who would like to associate themselves with our policy work, as well as those who would like to take advantage of our analyst-style meetings with top company executives.