Shareholder democracy is not an optional extra for a healthy economy.
UKSA’s view is that the Technical Group must ensure that the manner in which the recommendations are implemented does not erode the rights of individual shareholders or impose additional costs.
In particular, UKSA notes:
- The powerful impact of individuals speaking up, especially in person at AGMs, and challenging company boards (The size of the shareholding is immaterial).
- The smaller the company, the more important are individual shareholders.
- The UK, and this is clearly shared by HMG, needs a continual process of nurturing and growing small companies, and individual investors are frequently prepared to take a much more long-term approach to the institutions.
Our key aims for the digitisation implementation are that:
- Shareholder democracy is not an optional extra for a healthy economy. It underpins the interests and rights of individual beneficial shareholders as the rightful owners of companies. This means that the baseline level of service (effectively what certificated shareholders currently receive in respect of voting rights, information rights etc) needs to be provided to all shareholders, with no scope to opt out in exchange for a cheaper service, and continue to be paid for by issuers.
- Shareholders must be able to communicate with each other so they can hold management to account, for example by proposing shareholder resolutions. This requires shareholders who have a legitimate need to be able to get contact details of other shareholders; equivalent to getting a copy of the traditional shareholders’ register, but including email addresses as well as postal addresses. The system going forward needs to design for this.
Our more detailed analysis can be found here.
