(March 26, 2013) — The largest unions in the United Kingdom have committed to coordinated shareholder voting at all major company annual general meetings (AGMs) where their pension fund members have financial interests.
The Trades Union Congress (TUC) today announced it was joining with its two largest affiliated unions, Unite and UNISON, to launch Trade Union Share Owners. This new group aims to put union values at the heart of corporate governance, with a new approach to the way in which investments are voted on at company AGMs.
The group will ensure that whenever a FTSE350 company in which the unions’ pension funds hold shares holds an AGM they will send a consensus vote to the meeting. Shareholder advisory group PIRC is to offer advice and guidance to the group.
New voting and engagement guidelines have been drawn up to ensure that corporate governance policies that unions have long been critical of – all-male boards, excessive director pay and bonus packages, and the non-advertisement of new director positions – will be challenged by union voting at company AGMs, the group said today.
TUC General Secretary Frances O’Grady said: “This initiative represents a new approach to tackling corporate irresponsibility for unions. Our doors are open to all unions and other organisations who want to join us to bring about a change in the way corporate Britain runs itself.
The three pension funds together are worth £1 billion.
“It’s time to inject a long overdue dose of reality into British boardrooms and we are going to use the power of our pension funds to make a difference and to encourage a new and more responsible corporate Britain,” O’Grady said.
Since the financial crisis, there has been a push for shareholders to be more pro-active in steering the companies they own.
Yesterday, the European Commission published a green paper on the importance of institutional investors being available to capital markets for long-term financing. The commission launched a three-month consultation to examine how preserving long-term investment could be managed with the forthcoming review of the Institutions for Occupational Retirement Provision Directive.
UNISON General Secretary Dave Prentis said: “Unions are all about collective principles and action to enable progress and tackle inequity. Now we can demonstrate this with our collective investment power. We will be active shareowners of FTSE companies, in the interests of our scheme members and other stakeholders in the companies our funds own. We will be modern, responsible investors.”
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