16 February 2009
Sarah Wilson
Manifest has recently published its findings on voting at UK shareholder meetings in 2008 and this prompted suggestions that we should make a submission to UK's Treasury Select Committee on the Banking Crisis.
The Committee is still taking evidence and we were asked to address the issue of voting at UK Bank AGMs to see what dissent, if any, could be detected. This is in the context of the Committee's desire to look at 'The responsibilities of shareholders in ensuring financial institutions are managed in their own interests'.
The points that the research show are that:
The evidence therefore contradicts statements made that those shareholders who had not sold their shares in 2005 would have used their vote instead of exit. While voting might be considered by some as a 'blunt tool', of all the strategies available to shareholders it has the most legal force.
The Evening Standard has been quick to pick up this potential failure of the governance process. No doubt we can expect to see the Government introducing new legislation in light of the lessons learned. Let's just hope that this doesn't lead to a culture of compliance-driven box ticking.
