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CORPORATE MONEY

Call for greater shareholder involvement ... Continued
An article on shareholder democracy in public companies by Keith Hatchick

Without compromising their position, Hampel seems to have lost opportunity to compel companies to send their shareholders a business update at, say, quarterly intervals. A more robust line (not commented on by Hampel) of constituting a shareholder committee to which the board reports would probably be too invasive for the smaller listed concern, but might have been a useful tool for say those listed on the FTSE 100. Such a committee would be composed not only of institutions, but also individual shareholders and non executive/executive directors.

Hampel did consider the voting guidelines issued by such concerns as the ABI and NAPF and generally felt that so long as these conformed with Cadbury, Greenbury and its guidelines this was sufficient. But Hampel was concerned about unnecessary variation. An opportunity seems to have been lost in this regard since in liaising with both bodies, might it not have been possible to streamline the various guidelines into one code. Hampel's must interesting views relate to its approach to individual shareholders and the AGM and in this regard it has made a number of welcome recommendations:

• Having a question and answer session at the AGM thereby encouraging shareholder questions.



• Declaring in advance the total number of proxies received by the company for and against a resolution once it has been dealt with by the meeting on a show of hands. It was felt that this would encourage voting.

• Resolutions should not he "bundled" and shareholders should be able to vote separately on each substantially separate proposal. This is a welcome suggestion and should put a stop to deliberate avoidance of issues which may be important to some of the members.



• In addition to laying the accounts at the AGM there should be resolutions relating to the report and accounts with general discussion of performance and prospect.



• Allowing for the provision of written answers where questions cannot be appropriately dealt with by the chairman.



• The chairman of the AGM should decide which questions to answer himself and which should he referred to the chairmen of each of the remuneration, nomination and audit committees (who should be present at the AGM). This means that those responsible will be directly answerable to members at the AGM.



• Following the AGM there should be sent to shareholders a resume of the discussion at the meeting with voting.

Hampel's recommendations have made a gesture towards more shareholder involvement, it is a move in the right direction, but perhaps a little too prosaic. It remains to be seen whether this gesture is translated into a positive step forward.

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