1st Feb 2017 11:15
LONDON (Alliance News) - Royal Bank of Scotland Group PLC has been criticised by shareholder groups on Wednesday for blocking a vote on the establishment of a shareholder committee.
A proposed resolution to establish such a committee, submitted by the UK Shareholders' Association and ShareSoc on behalf of 168 RBS shareholders, was rejected by the state-backed lender on Monday as "inconsistent with the law and the company's constitution".
Instead, RBS said it supports the introduction of formal "stakeholder engagement panels" led by members of its Sustainable Banking Committee, in response to calls from the UK government for corporate reform.
"Stakeholder representation is hugely important to us; we want to be trusted, respected and valued by all of our stakeholders. We thank ShareSoc and UKSA for their input. We will continue to engage with all relevant bodies and are committed to embracing and supporting the government?s call for reform, which we believe will enhance engagement across UK industry as a whole," said Howard Davies, chairman of RBS.
However, on Wednesday, ShareSoc called RBS's refusal to put the committee proposal to a shareholder vote an "unreasonable obstruction of shareholder democracy". ShareSoc said RBS was using "tenuous technical excuses" to evade a vote and had not clarified the grounds for the rejection.
"It is disappointing that, instead of leading from the front on corporate governance, RBS have instead chosen to try to thwart this initiative," said Mark Northway, chairman of ShareSoc.
"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," added Northway.
Shares in RBS were up 1.3% at 224.65 pence Wednesday morning.
By Adam Clark; [email protected]
Copyright 2017 Alliance News Limited. All Rights Reserved.
Related Shares:
RBS.L