Position Statements
ShareSoc’s position on the key issues facing individual investors today, from shareholder rights and dematerialisation to coercive delistings and director pay.
Dematerialisation, nominee accounts and shareholder rights
A key plank of ShareSoc’s advocacy is the defence of shareholders’ rights. You can read more about our Shareholder Rights Campaign here.
The problems that arise from the disenfranchisement of shareholders, and the undermining of shareholder democracy through the pervasive use of nominee holding companies, are a key part of our manifesto.
The “dematerialisation” of paper share certificates, driven by the Digitisation Taskforce under Sir Douglas Flint and Mark Austin, will effectively result in all shares being held via nominees.
The recommendations will be amplified by the Dematerialisation Market Action Taskforce (DEMAT). ShareSoc has applied to participate, to make the case for individual investors.
Coercive delistings
The flow of recent shareholder-unfriendly delistings underlines serious issues with UK valuations, with the cost of maintaining a public listing or quotation, with the takeover code, and with the protection of minority interests after going private.
The AIM market, it seems, is becoming a hunting ground for opportunistic actors to sweep up good businesses on the cheap. The driver is the chronic undervaluation of UK small-caps, leading to coercive takeovers and delistings that force long-term individual shareholders out at a lowball valuation.
ShareSoc strongly opposes coercive delistings and has consistently campaigned against practices that disenfranchise minority shareholders during such events.
ShareSoc advocates for
- Stronger regulatory oversight of delisting processes
- Revisions to the Takeover Code in relation to “voluntary” insider offers
- Preservation of shareholder rights and voting power
- Mandatory liquidity solutions post-delisting
- Clear restitution pathways for trapped investors
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 let ShareSoc members 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.
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