Petition The Government to Encourage Public Companies to Implement Shareholder Committees so as to Restore Control to Shareholders

At present company directors appoint themselves and set their own pay. Instead of using sub-committees of the board, control should be restored to shareholders by the creation of separate committees to make recommendations on these matters. This would improve “shareholder engagement” and enable shareholders to regain control over board nominations and pay.

Such committees should consist primarily of the largest shareholders, with a representative of private shareholders (who collectively own more than 10% of many companies but currently have negligible influence), and a board director. How this system might operate has been recently described in detail by ShareSoc, and a similar system has been in use in Sweden for some years. It would ensure a more “consultative” approach to important decisions, would improve diversity among board members, and be an element in controlling the rapid inflation in pay. The Government needs to take the lead in establishing such arrangements.