How you can force companies to behave themselves
Buying even a single share in a firm gives you the right to question its practices
Angry at the size of energy company profits while millions are living in fuel poverty? Feel betrayed by banks paying bumper bonuses to senior staff?
These issues are encouraging more and more normal folk to be come shareholder activists. To get shareholders' rights in a firm, you only need to hold one share, and then you can attend a company's annual general meeting (AGM) and ask questions directly of the senior management.
Last year, the campaigning MP Tom Watson did just that at the AGM of News Corporation, the owner of The Sun newspaper. In a blaze of publicity he flew to Los Angeles to question the firm's chairman, Rupert Murdoch, about the phone-hacking scandal.
His aim was to force the firm to tell shareholders about the scandal.
"You haven't told any of your investors what is to come," he said to Mr Murdoch at the meeting.
Another high-profile figure who has used shareholder activism to publicise what he felt was corporate wrongdoing is celebrity chef Hugh Fearnley-Whittingstall. In 2008 he went to the Tesco AGM in Solihull to put a resolution that would force the supermarket chain to improve its standards on chicken-rearing.
It was also hit by shareholder activism the following year when trade union Unite got enough support from investors to file a resolution calling for an end to the exploitation and discrimination of workers that supplied meat to Tesco.
The union was supported by Pensions Investment Research Consultants (PIRC), which advises institutional investors on corporate governance and social responsibility.
PIRC also helped challenge in 2009 the power of Stuart Rose, when he became executive chair as well as chief executive of Marks & Spencer.
"Ultimately the public are the owners of UK PLC through their pension funds and other savings," said Tom Powdrill of PIRC. "If they are concerned about corporate behaviour, shareholder activism is a good way to encourage companies to toe the line."
It doesn't matter what issues concern you about a company; if you are a shareholder you have the right to ask questions of the bosses. However, if you want to raise a resolution you'll need to own 5 per cent of the issued share capital (which is beyond most of us) or be able to get 100 shareholders together (with a holding of at least £100) to support your resolution.
Andy Parsons, head of investment research at The Share Centre said: "The subject of corporate governance has never been so relevant and prominent, especially around the most vexing of issues, remuneration. Private investors continually hear about vast boardroom remuneration packages; trying to comprehend the vast discrepancies between the numbers mentioned and their own personal financial circumstances.
"In addition, it's always alarming to hear of bonus packages when a business may have clearly failed to deliver shareholder returns. Is it right that individuals can be rewarded for failure?"
While the banks bear the brunt of the current focus on bonuses, there are plenty of other firms facing similar examination. And the fact is if you become a shareholder, you are an owner of that firm and can have a say in how it conducts itself.
Even if you're not a shareholder, you are still likely to have stake in many UK firms through any pension scheme you belong to. Most pension funds invest in blue chips, so your future may depend on how well these firms run their business now.
"Shareholder activism is relevant to anyone with pension savings," said Catherine Howarth, chief executive officer of FairPensions, which campaigns for responsible investment. "As savers we have a clear interest in how companies operate – our incomes in retirement depend on it.
Ms Howarth believes shareholder activism is the smartest way to get an issue of concern on the radar of top corporate executives. Her organisation has just held a training sessions for potential shareholder activists. Attendees at the London session last Saturday, were taught the skills needed to hold company directors to account at their annual meetings.
"Shareholder activists are the ones who keep the pressure on and don't let companies get away with short cuts," said Ms Howarth. "Their persistence is changing companies in the UK and around the world."
She said that the big institutional investors should take a lead from the growing army of individual activists. "Our shareholder activists are setting an example to the investor community," Ms Howarth said.
FairPensions will be holding another training event at the end of March. For information go to www.fairpensions.org.uk/agmtraining.
The big banks will be holding their AGMs from April.
Bargain Hunter: Now's your chance to watch the best movies free of charge at home
How much lower will mortgage rates go?
The FTSE 100 is inching closer to its record high but can it maintain these levels?
MPs call for Equitable Life policyholders to be paid £2.8bn owed by government
Fuel poverty could claim 100,000 lives over next 15 years, warns energy charity
- 1 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 2 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 3 What color is The Dress, white and gold or blue and black? An eyewitness gives a definitive answer
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
This is what it's like to be dead, according to a guy who died for a bit
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads