Tony Byrne’s View 3rd July 2017

Jul 3, 2017 | Wealth & Tax Blog

I discovered a little known shareholders’ organisation called Sharesoc at an investment conference I attended earlier this year. I bumped into someone manning their stand and after listening to his short sales pitch I decided to join it on the spot! So why did I make such an impulsive decision? This is an extract from the home page of their website.

‘ShareSoc is a not-for-profit organisation, created by investors for investors. Our aim is to help you make money from investing in the stockmarket. To do this, we offer a range of educational and informational services, and represent your interests to government. We also offer assistance to shareholders when companies they invest in misbehave and do not act in shareholders’ best interests. It is only by joining together that we can campaign effectively on such matters. We want to ensure that shareholders have their proper say as owners of the businesses in which they invest.’

A quick browse of their website backed up their claims. I found it packed with useful information including an excellent investment books section as well as courses and meetings etc.

In their news section they have made a big issue about challenging a number of proposed resolutions by Royal Bank of Scotland that they propose shareholders should challenge, one of which is just 14 days notice for the actual meeting itself! They quite rightly wish to include a resolution to create a shareholders committee which RBS has refused. This is telling because modern, forward thinking PLCs are welcoming shareholder committees. It appears to be the usual case of directors feathering their own nests at the expense of private individual shareholders.

There has been a long term decline in the number of private individual shareholders in quoted companies in the UK. By the end of 2014 it was claimed by the Office for National Statistics that just 12% of private individuals owned shares in publicly quoted companies in the UK! Much of the reason for this is the advent of collective investment schemes such as unit trusts and OEICs which has resulted in investors becoming indirect investors in shares instead.

The problem is that the boards of directors of UK PLC have very little in the way of checks and balances especially with regard to pay and perks. Many a PLC director shareholder receives regular large pay and benefits increases as well as lucrative share deals which do not reconcile with the performance of the company. In other words they are often rewarded very highly for failure. That cannot be considered fair nor is it healthy for our economy as such executives have little if any incentive to make a real difference to the company’s performance and in turn the UK economy.

Clearly something has to change. Sharesoc is certainly a welcome addition to the UK share investing scene. I look forward to seeing how successful their lobbying for change will be in the future.

So why not join Sharesoc today? It costs nothing to become an associate member and just £45 a year to become a full member. Donations are welcome too.

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