Policies

The framework for investment

Successful and profitable investment depends on having an appropriate regulatory and legal framework so that companies can be managed successfully, so that the profits return to investors and not primarily to the company managers or the agents handling your investment, and so that the returns that result are not excessively taxed.

To achieve all of this has resulted in a very complex legal environment (for example, the Companies Act now in effect was the largest parliamentary bill ever published) and there are layers of Government regulations and rules from other bodies and policies on top of that. Some of these issues can seem very esoteric to the novice investor, or boring or of little account to those who simply want to make money. But they are the key to achieving investment profits.

Unfortunately there are still many things wrong with the UK investment scene. Individual investors are discriminated against in many ways because policies have been determined to a large extent by the views of institutional investors or major public company directors. Alternatively they have been influenced by politicians who have no experience or knowledge of stock market investment, and in some cases who view stock market investors as mere gamblers, or “speculators”, as they phrase it.

We actively promote the views of individual investors in these matters, trying to change the regulatory environment and practices where appropriate, and we respond to public consultations on these matters so that your voice is heard. The three key areas in which we would like to see reform are:

1. Proper enfranchisement of shareholders (nominee accounts to be discouraged) so that shareholder democracy is restored.

2. Reformed corporate governance so that shareholders control companies and not the management. Specifically that shareholder committees appoint the auditors, make directors appointments and set the remuneration of directors.

3. Changes in legislation to protect shareholders rights and enable shareholders to pursue errant companies and directors when necessary.

Our policies on those and other matters have been summarised in our Manifesto. These are the main points:

The oversight of companies should be restored to their owners.
Shareholder democracy should be improved and shareholder rights strengthened.
The legal framework for companies should be changed to improve accountability.
The taxation of investment profits should be reformed to make it more equitable and reduce complexity.
Excessive director pay needs to be restrained.
Direct share ownership should be encouraged.
Investment education needs to be improved.
Information flow to shareholders should be improved, with all shareholders receiving the same information.
Insolvency law should be reformed.
Stock market regulation and enforcement should be improved, especially for the AIM Market.

See the box to the right for how to obtain the full Manifesto document.

CONTRIBUTE

Policy is always under development and can also be changed.

Please let us know if you have suggestions for new policies, or comments on existing ones.

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TRANSPARENCY
Researching and monitoring companies should not involve looking through a glass darkly.

THE FULL MANIFESTO

In June 2011 we published our Manifesto that summarises our policies, explains why they are needed and provides more details on specific proposals.

It is contained in this pdf document: Manifesto (click on link to open).

That document will form the basis of future policy development.

SHAREHOLDER COMMITTEES

In September 2011 we published a note which explains how we suggest shareholder democracy should be improved, specifically in regards to the appointment of directors and their remuneration.

This is contained in this pdf document: Shareholder Committees (click on link to open).

That document will form the basis of future policy development.

DEMATERIALISATION, NOMINEE ACCOUNTS AND SHAREHOLDER RIGHTS

The problems that arise from the disenfranchisement of shareholders and the undermining of shareholder democracy are a key part of our manifesto. A current threat is the “dematerialisation” of paper share certificates where investors are present on the share register of a company and are hence “members” and recognised as such in terms of voting and information rights. We published this note in March 2013 on the subject: Dematerialisation.

Subsequently we launched a campaign on shareholder rights and the nominee system in October 2014 to tackle many of the issues raised. See this web page for more information: Shareholder-Rights .

DIRECTOR REMUNERATION GUIDELINES

In August 2018 we published updated guidelines for the remuneration of public company directors, which you can find here. They attempt to tackle the excessive pay that has become common in public companies, with separate guidelines now for larger and smaller companies, recognising the differences between those categories. They enable ShareSoc Members to check easily whether the pay of directors is within reasonable parameters.

EXECUTIVE DIRECTOR GUIDELINES

The importance of having active and competent Non-Executive Directors (including Chairmen) in public companies cannot be over-emphasised. They make all the difference between the long term success or failure of a business and are essential for protecting the interests of shareholders. In late 2012 we published, in conjunction with First Flight, a document entitled “Chair & Non-Executive Guidelines” which gives recommendations for the recruitment and remuneration of Non-Executive Directors with the objective of improving their quality and performance. It is present in this file: Non_Execs_Code.

IMPROVING THE AIM MARKET

In June 2016 we launched a campaign to improve the AIM stock market following widespread criticism of the way it operates and the quality of companies that have listed on it (with many subsequently delisting as a result). We give some specific suggestions for reform here: Improving-AIM

Group description:	Our group is interested in sustainable investing and our goal is to identify and evaluate businesses that will thrive through innovation and their transition to a ‘One Planet Economy’. By leveraging the skills of group members, we aim to deeply understand these businesses, particularly focusing on how they develop long-term valuable benefits for their customers. Each year, we plan to evaluate around seven businesses to identify opportunities where our valuation exceeds the market price. A successful outcome is defined as achieving a compound annual growth rate (CAGR), including dividends, of 10% over a decade.
Meeting Type/Venue:	Meetings are in-person in a pub near to Waterloo station in London.
Meeting Frequency/Timing:	Meetings are bi-monthly on a Monday from 10:45am to 4:30pm. Members are expected to also pay for their own lunch which secures the group free use of a private room in the pub. The cost is expected to be £35-40 per person, per meeting, in addition to your SIGnet membership fee.

Group description:	SIGnet Taunton is a new group with around 10 keen members at present, with a range of investment styles and experience. We welcome new members.
Meeting Type/Venue:	In person meetings at a golf club near to the centre of Taunton.
Meeting Frequency/Timing:	We meet on the first Monday of every month at a golf club near to the centre of Taunton, 11am until 3pm with a lunch break.

Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Monday of the month at 7:00pm.

Group description:	An online group for those who already have some experience in investing. Covering topics such as finding companies to invest in, financial statements and ratios, valuation / margin of safety, analysis of companies and investment trusts and exchange traded funds.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Wednesday of the month at 7:00pm.

Group description:	The Equity Income Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on dividend paying Investment Trusts, though there is also discussion around individual shares.
Meeting Type/Venue:	Meetings are held online.
Meeting Frequency/Timing:	Meetings are held every 6 weeks on a weekday between 7 and 8:30pm.

Group description:	A welcoming group open to all types of investors. Typical meeting content is to have a deep dive presentation on a topic selected by the participants and a session on buy/ sell/ key lessons learnt last month.
Meeting Type/Venue:	In person at a friendly pub close to Piccadilly Circus
Meeting Frequency/Timing:	Monthly during the evening on the first Wednesday of the month.

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	The first Tuesday of every month from 7 to 9pm

Group description:	Open to all investors / people with an interest in investing. Typical meeting will involve members talking about recent purchases, successes, failures and possible future purchases. Also with occasional visiting speakers or members making presentations on a topic of interest.
Meeting Type/Venue:	We aim to meet on the last Tuesday of each month in a private room at a pub in Playhatch. Start time 7pm with members encouraged to meet up around 6pm for a bite to eat / drink before hand, if their diaries allow.
Meeting Frequency/Timing:	7pm on the last Tuesday of the month. Meetings likely to last about two hours but with informal ‘overspill’ before / after.

Group description:	Our group members have wide ranging investment experience and work backgrounds. Discussion topics include reviewing our recent stock or collective investment buying and selling activity, plus what we are considering buying or selling and the reasons for our decisions. We also have a wider discussion on where we think opportunities might arise in the next few months and what we think needs to be avoided. Members occasionally lead discussions on specific topics such as recent events attended, articles or books of interest and sources of investment ideas and information.
Meeting Type/Venue:	During the pandemic our meetings were held on Zoom, but we have now resumed meeting in person at a location a few miles to the west of Colchester. Most meetings will now be in person, but it is possible that occasional meetings will be held on Zoom in special circumstances.
Meeting Frequency/Timing:	We meet midweek every two months. Zoom meetings run for about two hours from 10.30am and in person meetings from 11am until about 3pm, including a break for lunch.