Global menu

Our global pages

Close

Publication of the Investment Association Public Register of shareholder votes

  • United Kingdom
  • Corporate secretarial services

14-03-2018

Introduction

On 19 December 2017, the Investment Association, launched its Public Register (the “Register”) which records significant shareholder rebellions against proposed resolutions and details of resolutions which have been withdrawn. It includes all FTSE All-Share companies which have received votes of 20% or more against any resolution.

The Public Register is the first of its kind, and it formed one of the measures in the UK Government’s corporate governance reform package published in August 2017.

It is hoped that the Public Register will help increase transparency, accountability and scrutiny of listed companies by shareholders, media and the wider public. A key purpose of the Public Register is to increase focus on the public statements made by companies and the measures they have taken to address shareholders’ concerns. To date, 31% of companies on the Public Register have explained how they are addressing these concerns.

Methodology

The information displayed on the Register is pulled from data of AGMs and GMs held in 2017 and will include:

  • key details about the resolution, such as the meeting type, date, and title;
  • the results of the shareholder vote, including percentage of votes cast for and against, percentage of votes withheld and percentage of the issued share capital voted;
  • a link to the Annual General Meeting results announcement, including any statement made by the Board in response to the significant vote against at the time of the meeting; and
  • a link to any further announcement(s) the company has made in response to the dissent, including the views received from shareholders and what actions will be taken in response.

The Investment Association has explained that a company will be included on the Register if:

  • they were a constituent of the FTSE All-Share Index at the point when the company held an Annual General Meeting (AGM) or General Meeting (GM);
  • a resolution at the meeting received 20% or more votes against; and/or
  • a resolution at that meeting was withdrawn between the announcement of the Notice of the meeting and the conclusion of the meeting.

The Register is updated on a continuing basis, with the latest update being disclosed on the Register home page on the Investment Association website. At this stage, monitoring updates are not available from the Investment Association website.

Companies can notify the Investment Association of any public statements they have made in relation to a shareholder vote directly. Any additional statements will appear in the company’s entry. The Register will not provide comment on the content or the quality of any such public statements.  

Initial Analysis

The Investment Association has carried out an analysis based on AGMs and GMs held between 1 January to 15 December 2017, before the publication of the Register, by more than 640 FTSE All-Share companies. This shows that:

  • 22% of companies on the Register have had at least one resolution that received over 20% dissenting votes or was withdrawn;
  • shareholders remain concerned with pay-related issues, with 38% of resolutions being listed on the register due to high votes (20% plus) against remuneration-related resolutions, such as approval of companies’ annual remuneration reports;
  • the second most frequent resolutions to receive dissent are the re-election of company directors, with 32% of resolutions listed on the register as having high votes against re-elections of directors.

Commentary

There has been a broadly positive reaction to the publication of the Register. Standard Life Aberdeen, the UK asset manager, has stated that the Register will allow for greater influence and transparency. High Pay Centre, which campaigns against excessive remuneration packages for top executives, has noted that the Register will allow shareholders to increase pressure on company boards.

John Hunter, of the UK Shareholder Association, has also pointed out that the size of the register may reduce its effectiveness, with “more nuance drawn on whether any resolution is good or bad.”

In contrast, the reaction from companies themselves has been mixed with companies advising that there has been minimal response from the dissenting shareholders. In response to the 30.49% of shareholder votes received against its 2017 Directors’ Remuneration Policy, one company stated that  no response was received from institutional investors when contacted for reasons as to why the resolution was voted against.

Similarly, in response to a letter received from the Investment Association, another company issued a statement which pointed out that over 95% of shareholders had voted in favour of the 2016 remuneration policy. In response to the remuneration report which received more than 20% of votes against, the company simply stated that shareholder feedback would inform “future decision making”.

It is clear that the Register is an important step in the right direction, but it is by no means the final resolution. Both companies and shareholders must be willing to constructively engage with the register and use the opportunity at hand to improve governance within companies. It would seem that whilst the Register is increasing public scrutiny on companies, shareholders need to progress this scrutiny to a productive outcome by providing constructive feedback when contacted by companies.

For more information contact

< Go back

Print Friendly and PDF
Subscribe to e-briefings