Big business has rarely faced such intense scrutiny, not just from politicians, regulatory bodies and the media, but from individuals across Britain, still feeling the pinch from the financial crisis.
Calls for corporations to ‘play fair’ grow increasingly loud. ShareAction, which co-ordinates citizens and civil society organisations to push for action via the investment community, is making sure those voices are heard in the boardroom.
We’re finding that although business isn’t always eager to change, its leaders are increasingly willing to listen and engage. The key is addressing the right questions to the right people. One way in which ShareAction does this is through our programme of questions at company AGMs.
We have trained and supported over 100 people this year alone to attend almost 70 AGMs, raising issues from environmental policies and tax justice to farm animal welfare and executive pay, with the directors of Britain’s largest companies.
On the issue of the Living Wage alone we’ve had sustained success, working in collaboration with the Living Wage Foundation and Citizens UK. Following questions at AGMs and letters to CEOs signed by institutional investors whom we brought on board, a range of big firms have committed to accreditation as Living Wage employers: Pearson, SSE, RSA, GKN, Barclays, Legal & General and many more.
Today, over 50% of the FTSE 100 is in dialogue with investors and civil society stakeholders about Living Wages in their UK operations. It’s the combination of investor activism with traditional NGO campaigning that has proved so highly effective.
Graham Precey, head of corporate responsibility and ethics at Legal & General Group says, “Having concerned investor groups such as ShareAction at AGMs is a great way of bringing the material issues of the day to the attention of a modern board to focus the mind. Huge value can also be achieved by working with ShareAction out of the heat of AGMs to improve a business’s understanding of how to practically implement new responsible business practices such as the Living Wage. Both are effective ways of making business more responsible and transparent.”
ShareAction is not anti-big business, we’re just keen for the drive for profit to be tempered by social and environmental awareness to secure the future of our investments, our planet and the people who inhabit it.
Our AGM activism helps shareholders, some with as little as a single share, demand fairness and stronger business practice. In the last couple of months we’ve challenged non-executive bank directors to justify rewards for failure and a culture of excess in the firms they oversee and we’ve asked insurance company board members to explain their continued investment in high carbon companies in the face of climate change which, ultimately, costs them money, for example through the flooding that damaged thousands of homes in the last twelve months alone.
We recognise that the billions invested in our pension funds have the potential for significant influence and change. As such, a major part of our work is to engage with pension fund investment officers, trustees and their asset managers, calling on them to use their shareholder voice to promote sustainable business practice.
The investment community is blamed, not always unfairly, for aiding and abetting corporate short-termism. That’s why it’s so important that we see long-horizon investors, such as pension funds, engage actively with companies in support of sustainable practices. If our pension funds don’t make their voices heard, then short-termists in the market, including activist hedge funds, will dominate the messages getting through to corporate directors.
ShareAction works with dozens of partner organisations in civil society, from Greenpeace to UNITE, and our campaigns are varied, from calling on Shell to abandon its plans for off-shore Arctic drilling to demanding that telecommunications firms protect human rights.
Our vision is a future in which responsible investment is the norm. We want our pension funds and their asset managers to become open and accountable to savers about where their money is invested, and to use the powerful rights and privileges attached to shareholdings to promote sustainable business strategies.
Changing attitudes and practice in the investment industry is no small task but it’s happening already, one investor at a time, one company at a time because it is sane business practice and essential for a safe, clean and socially stable world.
Catherine Howarth, CEO of ShareAction, www.shareaction.org