SHARING OUR VOICE – Questions on the Details of the Share Your Voice Campaign
By: Sheryl Cuisia
As a diverse collective of individuals calling for more inclusive investor relations, TEA – The Engagement Appeal welcomes the much-needed spotlight on the retail shareholder cause brought on by the Share Your Voice campaign led by Archie Norman, the current Chair of Marks & Spencer. Given our common interest in shareholder democracy, TEA has naturally been following the campaign since it launched earlier in the year in April. Over the weeks since April, we have carefully reviewed the campaign’s proposals, as well as reached out to various contacts involved in the campaign. On 8 June, as a Co-Founding Director of TEA, I had the much-anticipated opportunity to speak on a panel with Archie Norman at the Quoted Companies Alliance (QCA) Annual Conference. The other panellists on the 35-minute session included Lord Lee of Trafford, who is widely renowned for being the first ISA millionaire, and Victoria Scholar, the Head of Investments at Interactive Investors. The panel was chaired by Sangita Shah, a non-executive director of the QCA.
With panellists as diverse as those called onto the stage on 8 June, and with Lord Lee and Archie Norman, in particular, having very strong opposing views, none of us should have been surprised that the debate was as lively, broad-ranging and colourful as it was. However, neither the actual session or the moments before or after it allowed for clarifications on the many questions I had on the details of the Share Your Voice campaign proposals.
To shed light on our reservations and why TEA, and I, in my personal capacity, have not been able to support the Share Your Voice petition, I share in this long overdue paper the key questions that have been concerning us. I share this article within my rights as a private individual, a member of the public, a TEA rep, and a stakeholder and self-professed M&S fan (I embarrassingly confessed on stage that practically my entire intimate apparel wardrobe is M&S!). Comfy clothes and Percy Pigs aside, we would welcome the opportunity to engage with the Share Your Voice Campaign team on our concerns. I therefore send this paper to them, as well as to other interested parties, within the spirit of TEA’s values of constructivism and collaboration.
Digital only AGMs
The Share Your Voice campaign calls for digital only AGMs1, and Marks & Spencer’s 2023 Notice of AGM2 discourages physical attendance at its 11am 4 July AGM, stating “Shareholders are advised not to travel to the venue on the day, as the meeting will be fully digitally-enabled. Board members will not be available for interaction with shareholders in person, as they will be taking part in the meeting broadcast under studio conditions. Any shareholders travelling to the venue against the Board’s recommendation will be advised to join the meeting electronically, and will be provided with assistance to do so, if needed. Refreshments will not be provided.”
- What compelled the campaign and M&S to call for such measures? Had M&S consulted with its shareholders on the said measures, and had Share Your Voice considered the guidance of the key investment bodies? Institutional Shareholder Services (ISS), Glass Lewis, The Investment Association, the Pensions and Lifetime Savings Association (PLSA) and The International Corporate Governance Network (ICGN)3 all advocate the hybrid AGM format as optimal and advise against the digital only format, except in extraordinary circumstances, like those experienced during the COVID lockdowns. In its July 2022 guidance on running effective AGMs, The Financial Report Council (FRC) also provided similar recommendations4.
- Whose voice is being shared via the digital only AGM proposal, when even the two retail shareholder bodies who initially supported the campaign, UKSA and ShareSoc5, have now clarified that they “strongly prefer companies to hold hybrid meetings, allowing physical attendance alongside potentially mass digital participation”?
- According to Nobel Laureate and Harvard University Professor, Oliver Hart, who is also a member of TEA’s Informal Committee, ‘companies should find out what shareholders want and should pursue that goal’6. How can the campaign and M&S assure the market that they are indeed considering shareholders’ wants, when they are going against the recommendation of investment bodies and shareholder societies?
- How can shareholders and other stakeholders be assured that the Share Your Voice campaign’s headline call for shareholder democracy matches its motives, given that the passing of a proposal for digital only AGMs would restrict shareholders’ ability to engage with company directors? Shareholders would be limited to engaging only electronically with the directors of the companies in which they are invested, i.e., physical, face-to-face engagement would be disallowed.
- In testing M&S’s claim that their fully digitally enabled AGM widens shareholder AGM participation, could the campaign’s digital only proposal (and M&S’s existing practice of disallowing shareholders from physical attendance) lead to what ShareAction warned against in their excellent 2021 white paper on the future of AGMs7? That companies and shareholders lose the opportunity to use the AGM as a platform for annual engagement.
Legislation vs Voluntary
In TEA’s consultations with various market participants, including PLC directors, recurring feedback we received was the lack of appetite for ‘yet more box-ticking’ and new legislation. Whilst legislation, such as the plastic bag charge, can lead to significant positive impact, the UK is actually not bad when it comes to effecting change voluntarily, with the board gender diversity movement spear-headed by the 30% Club, being a prime example of this. Furthermore, existing provisions provided by the UK Companies Act 2006, such as s793, which enable companies to identify the individuals behind nominee accounts and ensure that shareholders are not anonymous. Companies just have to take up this provision, which is readily available via share register analysis providers or via companies’ brokers or share registrars. Frustratingly, still very few companies take up this right, defaulting instead to understanding only the aggregate holdings of nominees, such as Hargreaves Lansdown, Interactive Investors and AJ Bell, as opposed to doing what Blackrock World Mining undertook this year running up to their AGM, which is to voluntarily identify the underlying holders in the nominees and to write to these holders to invite them to their AGM8. In doing this, the company evidenced their true commitment to investor inclusion.
Importantly, there have been significant technological advancements that mean participation in engagement process and proxy voting is now more widely available. Such advancements have been taken up by nominee platforms, including most recently by eToro and Hargreaves Lansdown, to more readily be able to facilitate proxy voting for their underlying clients.
- Do M&S take full advantage of the existing provisions available to them in a similar way, as say Blackrock World Mining? Do they serve s793 disclosures to the nominees platforms on their register so as to uncover the hundreds / thousands of individual beneficial holders behind the platforms?
- Share Your Voice’s proposal seems to look to pass on the responsibility of facilitating dialogue between companies and their ultimate shareholders to the platforms and the registrars, thereby removing responsibility from the company, which as described above can be fulfilled more easily and less expensively than what companies may initially think. How would the campaign’s proposal work in practice, what advantages would this proposal have over existing provisions that companies can readily take up, and what would be the cost implications to the underlying beneficial holders as a result of this increased cooperation between the registrars and the platforms?
Tech and Entrepreneurship
The campaign calls for a ‘sector-wide standardised technology solution’. As already established, there have been significant developments in the fintech space that look to democratise shareholder engagement, e.g., 1) Investor Meet Company, the online IR streaming service, 2) Proxymity, the UK unicorn that is primed to change the way proxy votes are transmitted and reported upon in real-time, 3) Tumelo, which looks to provide transparency via pass-through voting solutions for individuals and funds, 4) Tulipshare, the retail shareholder activism platform, 5) RetailBook, the diverse and inclusive capital raising platform, and 6) even the incumbent, ‘centraliser’ of proxy voting, Broadridge, are innovating their existing solutions.
- What, more specifically, is the campaign’s plan for a ‘sector-wide’ tech solution, and given the many available routes for tech dev, including DAO-based concepts, how would having ONE central tech ensure that the best and latest tech is indeed employed to build this central solution, and that this solution will fit the whole market’s requirements?
- Choice gives consumers power and tech and innovation fuel entrepreneurship and commerce. How does the campaign’s proposal for a sector-wide solution contribute to both points?
Digitisation & Data
TEA supports the Digitisation Taskforce’s efforts towards dematerialisation, and agree with the need for increased transparency, especially as this benefits individuals in-line with the Consumer Duty guidance.
- In the move towards dematerialisation and Share Your Voice’s proposal for email addresses, how does the campaign propose to ensure that 1) shareholders’ preferences are taken into account, 2) that individuals are not disenfranchised from participating in investments, and 3) that data protection rights are properly upheld?
We are calling for continued engagement on the important matters raised by Share Your Voice, as well as other movements, such as TEA – The Engagement Appeal, Make My Money Matter, GAIN, Female Invest, EarthPercent and so many others that value people, the planet and prosperity. With a subject matter as complex as inclusive investor relations, good, continuous dialogue is essential, as well are careful, scrutiny, critical thinking, collaboration and constructivism, values promoted by TEA.
The Goal of Mutual Understanding and Way Forward
As can be seen in one of my past LinkedIn posts, and the shout-out to M&S in TEA’s inaugural white paper, I and TEA are overall appreciative of the efforts of Archie Norman, M&S and the Share Your Voice campaign. However, as a concerned stakeholder and an inquisitive retail shareholder, I for one, wish to make sure that the details of our respective campaigns are indeed championing the same cause – true shareholder democracy. For that, I would need absolute clarity on the items mentioned above, and the plan is that engagement will help achieve this.
About TEA – The Engagement Appeal
TEA is the platform for inclusive investor relations. Its objective is to increase interaction between corporates and their retail investors. By improving interaction, the corporates’ investment proposition will be better understood by retail investors and share price will not always be subject to irrational downward pressure. TEA aims to help corporates prepare for greater shareholder participation whilst targeting enhanced financial literacy amongst retail investors and improving their chances of building a successful portfolio. Our White Paper, ‘The Path to Inclusive Investor Engagement’ sets out how public companies may significantly improve relationships with their shareholders and build longer term investor value. The paper was developed with the help of the members of the informal committee, which include individual investors and representatives from organisations ranging from impact groups, ShareAction, Tumelo, Tulipshare, and Rethinking Choices, to City firms, Mishcon de Reya, Peel Hunt and Sillion, and gen z-founded start-ups, CAUSE and Circular Regeneration. Our mission is backed by TEA’s Inaugural Sponsor, Morrow Sodali, and ground-breaking tech firms, Proxymity, Lumi, Investor Meet Company and Pressrisk and Paul Lester, CBE, Chair of FTSE-250 Essentra plc, who is calling on other PLCs to also join in the movement.
About Sheryl Cuisia, Co-Founder of The Engagement Appeal
Sheryl is a social entrepreneur, individual investor, and advocate of stakeholder capitalism. In 2011, she founded Boudicca Proxy, the leading shareholder engagement consultancy, which became part of the FTSE 250 company Equiniti Group in 2018. Over 20 years in corporate governance advisory, she has overseen 1,000 campaigns across multiple industries and markets. Sheryl is the inaugural Entrepreneur-in-Residence at King’s College, Cambridge University, the Co-Founder of the Women’s Company Secretary Circle, a judge of the NED Awards, and non-executive director of CTFN UK. She was also briefly a director and then Chair of the UK Individual Shareholders Society (ShareSoc) between September 2021 and March 2022. She holds an MBA from Bayes Business School and is pursuing a doctorate in business administration.
Coverage in national news publications:
- M&S shareholders denied chance to buttonhole board https://www.thetimes.co.uk/
article/m-amp-s-shareholders- denied-chance-to-buttonhole- board-rhrbxktqh
- M&S tells investors to stay away from AGM: Sparks fly after it warns shareholders they are not welcome https://www.thisismoney.co.uk/
money/markets/article- 12253927/M-S-tells-investors- stay-away-AGM-Shareholders- not-welcome.html
- Backlash against Marks & Spencer’s digital AGM https://www.thetimes.co.uk/
article/backlash-against- marks-amp-spencers-digital- agm-d0ts6fdfw
- M&S chief is forced to rethink digital-only AGM plan after a backlash from shareholders https://www.thisismoney.co.uk/
money/markets/article- 12264107/M-S-chief-forced- rethink-digital-AGM-plan- backlash.html
- The Times view on M&S’s remote shareholders’ meeting: Not Just An AGM https://www.thetimes.co.uk/
article/the-times-view-on-m- ss-remote-shareholders- meeting-not-just-an-agm- g522lgbj6
Join TEA! Let's shape the financial inclusion agenda together by facilitating inclusive investor engagement. Sign up now for FREE!
Sign up to our newsletter to stay up to date