The UK Shareholders’ Association (UKSA) and ShareSoc said Royal Bank of Scotland has confirmed that a resolution on the creation of a shareholder committee will be put to the bank’s AGM in May.

The shareholder groups said an RBS Shareholder Committee would likely be advisory in nature.

“No formal powers have been stipulated, but (the committee) could look at and comment on strategy, governance, executive pay and other high-profile issues,” said the groups in a joint statement.

The proposal needs 75% shareholder support.

The shareholder groups said RBS has not indicated whether its board will recommend shareholders vote for or against the resolution.

UKSA chairman John Hunter said: “This just could be the first step in restoring the rights of beneficial owners.

“Shareholder rights have been dangerously eroded by the over-dominant behaviour of asset managers and the nominee system which removes ownership rights.

“I call on all beneficial owners to lobby their fund managers to vote in favour of this resolution.”

The groups stressed: “The Government, via UKFI, owns 70.48% of RBS and its stance will therefore hugely influence the AGM outcome.”

 

ShareSoc chairman Mark Northway said: “I see this as a great opportunity for RBS to lead the rest of the UK towards better governance.

“Getting the shareholder resolution on the RBS AGM agenda is a huge step forward in making all UK plcs aware of the importance of individual investors and the need for company boards to engage more effectively with all shareholders.

“We are very pleased that RBS has allowed this debate and is willing to consider the benefits of a shareholder committee.

“The initial role of any new committee is likely to be relatively low key but is likely to extend over time as the benefits of formal shareholder engagement are realised.”

Catherine Howarth, chief executive of ShareAction, said: “ShareAction is pleased to be a co-filer of this important resolution.

“Resilient firms listen to all their shareholders and stakeholders, and it helps when effective mechanisms are in place to make this happen.

“We hope to see shareholder committees take off as a valuable innovation in British corporate governance.

“RBS faces many challenges, not least managing the financial risks and opportunities of the transition to a low carbon economy.

“We look forward to the RBS shareholder committee pressing the bank’s board and management to focus their efforts on such long-term drivers of success.”

Daniel Godfrey, formerly CEO of the Investment Association, Founder of The People’s Trust and member of the Independent Governance Committee at Legal and General, said: “Good for RBS in agreeing to put the proposal for a shareholder committee to the AGM.

“A shareholder committee will provide meaningful dialogue between the bank and its individual shareholders who will at last be able to raise concerns and know that they’ll get a response.”