Policy and Campaigns – Progress Update 14 June 2021

ShareSoc News Item by Director Cliff Weight

In May and early June, we worked on:

Woodford Campaign: Leigh Day received their response from Clifford Chance to their LBA (Letter Before Action). It looks like the case will go to court but it could take 3 more years. Leigh Day remain the only claim with insurance and funding in place. Harcus Parker have funding but do not have ATE insurance. RGL have neither insurance nor funding (other than funding for an initial step). Leigh Day (whose claim ShareSoc have endorsed) now have c 10,000 claimants registered and are the leading claim.
Sirius Minerals Shareholder Group, Sirius Claim Group: We expect to shortly sign an agreement with a law firm who wish to take on the claim.
Voting Guidance and Shareholder engagement: We continue to test our new ideas with a pilot study of FTSE30 companies. This is a major exercise and reports have been published for:

Anglo American, AGM 5 May	GSK, AGM 5 May
Aviva, AGM 6 May	Imperial Brands, Feb 2021
Bae, AGM 6 May	LSE, AGM 28 April
Barclays, AGM 5 May	NatWest, AGM 28 April
BAT, AGM 28 April	RELX, AGM 22 April.
Compass, Feb 2021	Unilever, AGM 5 May
Glencore, AGM 29 April

Consultation responses. We submitted a responses to:
1. BEIS: Mandatory Climate-change disclosures;

And we are preparing responses to

1. BEIS audit review consultation
2. FCA A new Consumer Duty
3. FCA High risk and illiquid investments
4. FCA Long Term Authorised Funds

SVS/ITI: we continue to provide a Support Group to help those who assets were with SVS which went into administration and were transferred to ITI.
FCA: Mark Northway wrote In March to the FCA Chair asking for a meeting to discuss various of our concerns. The Chair has now agreed to meet.
Bacanora Lithium: We have provided support to the Save Bacanora shareholder action group and ShareSoc Patron Lord Lee has tabled a PQ about the national interest of this takeover.
Law Commission Review of Intermediated Securities: We continue to await the next BEIS response to the Law Commission Review of Intermediated Securities, which inter alia is about nominee accounts and the disenfranchisement of individual investors.
AGMs: We believe that the AGM needs major reform. It has changed little since the mid-twentieth century. Many companies view the AGM as a statutory necessity – as something that has to be done; rather than an opportunity to engage with shareholders.

We believe the AGM process is broken. Most investors only play lip service to it and do not attend AGMs. Many companies view the AGM as purely administrative – as something that has to be done; rather than an opportunity to engage with shareholders.

The FRC is currently working with stakeholders to prepare a paper on the future of the AGM. We see the AGM as part of a wider process of engagement with stakeholders which includes, amongst other things, the publication of the annual and interim reports. We see the AGM as having two key components:

1. 1. the formal business of the AGM – re-election of directors, adoption of the accounts etc. and voting on resolutions;
  2. the formal Q and A (plus informal interaction between stakeholders and directors) which enables stakeholders to hold directors to account and gather further information about the company and its prospects.

The AGM should demonstrably represent a good use of time for all shareholders. At present (most) analysts and fund managers do not attend AGMs. To encourage them to do so, companies should be encouraged to include the following either in the AGM or immediately before the formal proceedings of the AGM:

1. 1. Business trading update
  2. Business strategy update, including e.g. business model, competitive advantages (and/or Moat), future capex requirements and funding plans.
  3. Governance update.
  4. Questions and Answers (whilst pre-AGM webinars are useful, it is important that Q&A occur at the AGM, because only at the AGM is there a formal requirement to minute what occurs, including Q&As).

We see the AGM as the outcome of an ongoing engagement process with shareholders, with voting (and in extremis shareholder resolutions) as a way of shareholders feeding back their dissent when the engagement process has failed. The AGM needs to be made attractive and a good use of time for all shareholders.

We believe the best model for future AGMs is a hybrid one where shareholders can attend either in person or remotely via the web. Many shareholders are unable to attend physical AGMs because of logistical constraints. Some companies even ‘play’ on this by scheduling their AGM at inconvenient times of day and in inconvenient locations.

The nominee system must be made to work so that individual investors can easily:

1. 1. be made aware of AGMs
  2. vote the shares that they beneficially own via nominee.

The default position must be that investors will receive notification of publication of annual reports, notices of meeting and the opportunity to vote their shares, UNLESS they opt not to. Any such opt-out should have to be re-confirmed annually. In this way, all investors will be reminded (educated) that when they buy shares in a company, they also have ownership rights and responsibilities.

Post Date: June 14, 2021

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:	The Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on all types of income generating financial instruments, from stocks through Trusts and Funds and ETFs to retail bonds. Meetings involve presentations from members, who are also expected to lead discussions from time to time, as well as discussions on what has been bought and sold since the last meeting.
Meeting Type/Venue:	Meetings are in-person in a venue in Central London.
Meeting Frequency/Timing:	Meetings are usually held on the last Thursday of every other month, starting with an informal lunch around 1pm followed by discussions until around 5pm.

Policy and Campaigns – Progress Update 14 June 2021

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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:	Our group is a broad church that contains investors of varying experience. Our members’ backgrounds are diverse and include corporate banking, engineering, teaching and the leisure industry. We generally pick a discussion topic for every meeting, e.g. housebuilders or the defence industry, and members are invited to research and discuss different aspects or companies within that industry. We also discuss stocks and investment trusts that we have bought, sold or are interested in and the reasons behind our decisions, and try to make sense of the ever changing investment environment. Discussions are robust and challenging but we are a friendly and approachable group who welcome investors of all levels – we just ask that you contribute, at whatever level you can.
Meeting Type/Venue:	Our meetings are held in a private room at a nice pub near to South Ealing tube station (Piccadilly Line), not far from Ealing Broadway (District, Central and Elizabeth Line).
Meeting Frequency/Timing:	We meet every 2 months, usually on a Wednesday morning at 11am.

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.

Policy and Campaigns – Progress Update 14 June 2021

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