Shareholders 'rarely consulted on gifts'

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The Independent Online
MORE THAN a half of 31 leading British companies which between them contribute pounds 1.3m to the Conservative Party see no need to consult shareholders over political donations. Most of them view it purely as a matter for the board of directors, writes David Nicholson-Lord.

Evidence submitted to the Home Affairs select committee examining political donations shows that even firms that have consulted shareholders have not done so for many years. Rank, which in 1991 gave pounds 25,000 to the Conservatives, obtained shareholders' approval in 1985, Marks & Spencer in 1986.

Shareholders' 'approval' is often ambiguous. In the case of Marks & Spencer, 261 million votes supported donations, 50 million were against but 331 million votes were not exercised.

According to Pensions Investment Research Consultants, which conducted the survey, the findings are evidence of double standards over donations by companies and trade unions. The 1984 Trade Union Act requires unions to ballot members every 10 years if they wish to maintain a political fund: members can also 'contract out'. There are no comparable requirements for companies.

A previous survey showed that of 38 of the United Kingdom's largest 100 companies which made political donations in 1989, only one sought authority from shareholders. In 1989-90 the Conservatives received 94 per cent of all corporate political donations.

PIRC argues that big investors are turning against donations. After the collapse of Polly Peck, one fund manager is quoted as saying: 'Not only did we have the indignity of losing pounds 1m . . . without the slightest warning from auditors, but I now find pounds 1m was also donated by Asil Nadir to the Conservatives without consultation.'