All of us own shares in companies, some directly, but most indirectly through our pension funds or life investment policies. That means we should be able to have our say in how they are run at their annual meeting (AGM), but because the shares are owned indirectly people don’t immediately have the right to attend this meeting.
The overwhelming majority of the shares in large quoted UK companies are held by the major financial institutions, both here in the UK and overseas. Pension funds, life insurance companies, unit trusts and the like have, with just a few honourable exceptions, a dreadful record of failing to use their ownership rights to call companies to account for their behaviour. In a few extreme cases they have mustered a significant minority of shareholders to abstain on key motions at an AGM, but most of the time company managements have things all their own way with little opposition.
You may think there is little the small shareholder can do in the face of the large block voting by the big institutions, but surprisingly you would be wrong. No amount of effort will enable small shareholders to influence the outcome of the big votes at a company AGM, those will go in the management’s favour thanks to the block institutional voting. But with the opportunity to ask questions at the end of the meeting, individuals can raise subjects which companies would rather gloss over. With the press present and looking for a story, a well structured question can embarrass businesses into agreeing to do something they might otherwise have avoided.
Last year Fair Pensions activists raised the issue of a living wage – higher than the minimum wage, particularly in London – at many corporate AGM’s and secured a commitment in some cases to ensure that not only their own workers, but also those of their subcontractors received at least this amount. This year they will be back again to check whether those companies have followed up on promises made at the time.
It isn’t only through shareholdings though that the individual can force a large company into doing the right thing for their workers or the environment. An online campaign targeting Apple over conditions for workers in the Chinese factories where their products are made, has forced the company to appoint the Fair Labor Association to carry out an audit of all eight factories involved. After visiting the first couple the organisation commented that there are a ton of issues, but also that they were better than the garment manufacturing facilities in the region.
Talking of clothing, last year a Greenpeace campaign forced leading clothing companies to commit to removing toxic chemicals from their manufacturing processes used in China. Nike, Puma and Adidas were the first to be targeted, all finally agreeing to detox their supply chains, before the campaign moved on to force H&M to make the same commitment.
So whether you own shares directly, indirectly through your pension, or not at all, but still have access to the internet, you can get involved in campaigns to force companies to adopt better standards of practice. Lone voices can become very powerful when gathered together in their thousands and hundreds of thousands and few companies can afford to alienate that many potential customers.