RBS Rejects Democracy

PRESS RELEASE 87 01/02/2017

The Royal Bank of Scotland (RBS) has rejected a requisition to implement a Shareholder Committee.

ShareSoc will not permit this unreasonable obstruction of shareholder democracy to stand. It is a basic principle of Company Law that shareholders can requisition resolutions which must be put to a vote of shareholders. If the directors do not like a requisition, then they can advise shareholders to vote against it. But they should not be using tenuous technical excuses to avoid putting it to shareholders.

Their grounds for rejection have yet to be clarified (see note 1), but ShareSoc took great care to ensure that the requisition was valid and would not create practical problems with implementation. The requisition provided RBS with wide discretion on how they implement the proposal. (see note 2)

RBS is not intending to propose an alternative resolution addressing their drafting concerns. Hence it is clear that the board do not want a Shareholder Committee, and the objection is not really to the specific drafting of the requisition.

ShareSoc is consulting legal advisors on this matter.

ShareSoc Chairman Mark Northway had this to say: “It is disappointing that, instead of leading from the front on corporate governance, RBS have instead chosen to try to thwart this initiative. This behaviour by the directors of a company that is majority owned by the UK Government underlines the broad reticence of UK boards to address the breakdown of the agency model and the rights of shareholders. There is more work to do at RBS before the government places its 73% holding back into the market.”

The resolution, from 168 shareholders, was jointly coordinated by ShareSoc and the UK Shareholders Association (UKSA).

Note 1

RBS accepts that the resolution was properly delivered under CA 2006 S153 with the requisite number of member signatures, but is refusing to distribute and / or to present the resolution to the AGM on the basis that it is “inconsistent with the law and with the company’s constitution”.

In a meeting, representatives of RBS suggested that the proposed resolution breaches CA 2006 S172, and that this is the basis for claiming inconsistency with the law. They further claimed that the resolution is inconsistent with the company’s articles, by dint of being too broadly drafted. This notwithstanding the fact that it is a special resolution.

ShareSoc have asked RBS to provide their reasons in writing, but so far RBS has not done so.

Note 2

The RBS AGM resolution is quite simple. It reads as follows

That the Directors establish a Shareholder Committee, the members of which will include representatives of large shareholders willing to serve and a representative of retail shareholders, and that the Directors be instructed to use any and all means to implement this resolution, subject to appropriate conditions to ensure that the CA 2006 S172 duty to act fairly between members is not breached.

More Information

The purpose of the introduction of a Shareholder Committee is to improve corporate governance in a company. We suggest that this initiative will significantly benefit corporate governance at RBS, and represents a valuable opportunity for RBS to lead the way in exploring a concept which works well in other countries, which is under consideration by the UK Government, and which could have broad application in addressing the current breakdown in the agency model in UK public companies.

Note that more information about Shareholder Committees and their applicability to RBS can be obtained from this page of the ShareSoc web site.

Investors in RBS can register their interest in the campaign on that web page.

For further information please contact:

Roger Lawson

Deputy Chairman, ShareSoc

Telephone: 020-8295-0378

Or:

Cliff Weight, Director, ShareSoc

Telephone: 01737-202075

Post Date: February 1, 2017

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.

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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.

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.

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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.

RBS Rejects Democracy

PRESS RELEASE 87 01/02/2017

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