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Has Barclays’ board complied with company law?

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.

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