My share, my vote: AIC launches petition to change company law

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “All shareholders must be able to vote – it’s their fundamental right. The Companies Act currently states that nominees, such as platforms, may pass on company information and voting rights. We believe that’s not good enough. These rights must be passed on and the law should be changed accordingly.

“I have written to all the major platforms urging them to take steps ahead of a law change, including automatically opting customers in to receive this information unless they actively choose to opt out.

“We are also calling for a change in section 793 of the Companies Act so that nominees provide companies with email addresses as well as postal addresses. We need to bring the law up to date. Being able to email shareholders will make communication more timely and cost effective.

“I am delighted that our campaign has already attracted strong support. If you believe shareholders should always have the right to vote, I urge you to sign our petition and send a powerful message to government to make these simple changes.”

Support for the campaign

The Baroness Altmann CBE said: “This campaign is vital to ensure better shareholder protection. If shareholder democracy is to work as Parliament intended then it is vital that investors are properly informed and can exercise their votes. The failings revealed by the Saba affair showed how investors could be left unaware of important threats to their interests so it is right that we look to tighten up the laws. I’m glad to support the AIC in its efforts.”

Baroness Bowles of Berkhamsted said: “This campaign goes hand in hand with the political consensus to get retail investors more involved in investing in UK companies – how can that happen if platforms deprive them of their participation or charge them to vote? The government shouldn’t wait, it should pledge to make this change at the earliest opportunity, such as in the promised bill to create the new Audit, Reporting and Governance Authority.”

James Ashton, Chief Executive of the Quoted Companies Alliance (QCA), said: “Investment platforms must offer a baseline service enabling efficient and reliable communications between companies and their shareholders and at the heart of that dialogue lies voting. The QCA is pleased to support the AIC’s ‘My share, my vote’ campaign for a simple change in company law that is essential if the UK is serious about reviving private investors’ appetite for equities.”

Mark Northway, Director of ShareSoc, said: “With the exception of a tiny number of enlightened investment platforms, the current operation of the nominee system in the UK effectively disenfranchises individual investors. Stewardship and governance are far too important to be left to market forces. The delivery of shareholder communications and facilitation, without charge, of the exercise of shareholder rights must be made mandatory. ShareSoc supports the ‘My share, my vote’ campaign.”

Chris Kinder, CEO of the Investor Forum, said: “The Investor Forum believes that the exercise of shareholder rights is a fundamental part of the stewardship of one’s assets. Companies need to hear from all of their investors – retail and institutional – and be able to engage with them in the most efficient way.”

More information about the ‘My share, my vote’ campaign is available on the campaign webpage, theaic.co.uk/my-share-my-vote.

Lessons from the Saba campaign

The problems that some investors experience voting their shares through platforms were highlighted by the recent campaign by activist investor Saba Capital Management.

Richard Stone, Chief Executive at the Association of Investment Companies (AIC), said: “Saba’s campaign highlighted the importance of all shareholders voting their shares, as well as the challenges many investors face in trying to exercise their rights.

“The major platforms stepped up to the challenge and wrote to all their customers. Along with significant activity by the companies themselves and a high-profile media campaign, this resulted in unprecedented levels of voter turnout. However, there were still too many examples of platforms that did not pass on the information or voting rights, or tried to charge investors, wealth managers or advisers to vote their shares. This has to stop.”

To sign the AIC’s petition, click here. 

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Notes to editors

1. The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 304 members and the industry has total assets of approximately £270 billion.
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