Britain’s biggest investment platforms have thrown their weight behind a campaign led by Marks & Spencer chairman Archie Norman to boost shareholder democracy.
It follows last week’s exclusive Mail on Sunday report that Norman, one of the City’s most respected bosses, had written to Business Secretary Kemi Badenoch urging changes to company law to propel a new wave of popular capitalism.
Richard Wilson, chief executive of Interactive Investor, the UK’s second biggest investment site, last night hailed Norman’s campaign as a ‘tipping point’ for shareholder democracy.
A good sign: Richard Wilson, chief executive of Interactive Investor, the UK’s second biggest investment site, hailed Norman’s campaign as a ‘tipping point’ for shareholder democracy
He said: ‘While the rise of investment platforms such as ours have made investing cheaper and easier, it also means that UK plc has lost a direct connection with its shareholders. That does not have to be the case.’
He added that private investors ‘shouldn’t be inhibited by red tape or time-consuming bureaucracy, especially in today’s world where technology provides simple, time-saving solutions’.
His comments were echoed by Danny Cox of Hargreaves Lansdown, the UK’s largest retail stockbroker, who said: ‘We are engaging with this initiative and supportive of its sentiment.’
The most radical proposal in Archie Norman’s ‘Share Your Voice’ campaign is for online-only annual meetings. Under current rules, companies must declare a physical venue for their meetings, but only need to have two or more shareholders present in person.
Norman also wants to improve links between companies and small shareholders who use nominee accounts on platforms such as Interactive Investor, where their holdings are pooled with those of other savers. These are a popular, low-cost way of owning shares, but companies do not know the identity of nominee investors and cannot communicate with them directly.
Instead of letters, Norman wants digital to be the default way of contacting shareholders and to require them to provide an email address before buying shares.
Share Your Voice welcomed the brokers’ support but said there was still ‘a long way to go’. A spokeswoman said: ‘Supposed solutions remain complex and often costly sticking plasters. We need businesses, all platforms and registrars to be required to work together to make change happen.’
City grandee Sir Douglas Flint is leading a taskforce looking at bringing the UK’s antiquated shareholding rules into the digital age.
A Department for Business and Trade spokesman said it looked forward to its recommendations.
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