UK activist investors lag Europe - but are catching up

Last year's shareholder spring was not a one-off, says Roger Aitken, and more is on the way.

Ahead of the annual general meeting (AGM) season, the National Association of Pension Funds warned big companies this week that they face another shareholder spring.

It wrote to the chairmen of all FTSE 100 and 250 companies warning them to clamp down on bonuses or face protests from investors.

Successful shareholder revolts last year led to the resignations of Andrew Moss at Aviva and Sly Bailey at Trinity Mirror.

To exercise shareholder rights at a company you need to hold at least one share, and you can then attend the AGM and ask questions directly of the senior management.

Shareholder activists no longer need to cover their faces in war paint or protest loudly outside the AGM to make their point. Instead investors can let shareholder associations do the job for them.

But can this new shareholder activism, consisting of dialogue and formal shareholder proposals, work to make companies stay on track and behave?

Across Europe shareholder associations have seen mixed fortunes, but Britain is certainly lagging behind, according to Roger Lawson, the chairman of the UK Individual Shareholders Society (ShareSoc).

He says there are a "number of reasons" why associations in Britain have not blossomed to the same extent as in continental Europe. "Often it tends to be stimulated by specific issues such as excessive pay, which has been a hot topic of late," Mr Lawson says.

European success stories include the Swedish Shareholder Association and its counterpart in Denmark which have some 70,000 and 20,000 members respectively. That is far larger than ShareSoc, spun out of the UK Shareholder Association two years ago, which has a membership hovering at just over 2,500.

And the Scandinavian societies are not alone. Deutsche Schutzvereinigung für Wertpapierbesitz, a German society formed in 1947, has about 25,000 members today.

More than anything else the disparity between the UK and the rest of Europe can be attributed to a "cultural problem", according to Mr Lawson. "There is an inherent reluctance among the English to complain, tied to a faith that directors are seen as doing the right thing by their companies," he says.

"It's also generally viewed as bad form to challenge the directors or attack them for incompetence. And nobody likes to vote against any resolutions."

However, it sometimes comes down to the efforts of shareholders themselves to force issues. Aside from direct action, the shareholder activism model includes individuals signing up to shareholder societies to leverage their collective clout. Typically members receive various benefits – such as investment education and policy advice – for a small annual fee.

For example, the Danish Shareholder Association, formed in 1984, has the stated objectives of "educating members through investment education, lobbying for the rights of and influence by Danish private investors, and promotion of investment in general."

Klaus Struwe, a political adviser to the association and a consumer member of EIOPA Occupational Pensions Stakeholder Group, says: "From AGMs in 2013 there is now the possibility of having a consumer representative. That's something we pushed hard for and succeeded in securing."

ShareSoc got involved in a diverse range of contentious issues last year. These included attacking the CEO's £4m pay package at mid-cap Premier Oil's AGM in May and successfully securing a U-turn from management over a long-term incentive plan (LTIP) initiated by Intercede Group, an AIM-listed software company.

Roger Lawson says: "There is a demand for intelligent and unbiased comment on stock market investment but the investment world is dominated by organisations and companies promoting their own agenda for commercial purposes. Our not-for-profit basis and focus on individual investors sets us apart."

Pensions Investment Research Consultants (Pirc), an independent research and consultancy which provides services to institutional investors on corporate governance, echoes ShareSoc's stance on Intercede, and revealed last month that it planned to oppose the introduction of all new LTIPs, claiming that they were "not long-term" and did not incentivise.

While many observers advocate greater shareholder engagement to solve the ills on the corporate governance scene, UK shareholders who feel short-changed by companies they invest in might ponder the merits of joining a shareholder activist organisation.

For more information on ShareSoc visit Associate membership is free. The organisation's next event is a seminar where technology companies are presenting to members in London on 20 March.

FairPensions, which campaigns for responsible investment, also runs regular seminars on AGM Training for potential shareholder activists. For more information go to

Roger Aitken is an associate analyst at the benchmarking firm BISS Research in London

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

New Articles
tvDownton Abbey Christmas special
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Arts and Entertainment
Life and Style
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Day In a Page

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all