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You can find the current article at its original source at https://www.theguardian.com/business/2016/dec/30/royal-bank-scotland-rbs-investors-corporate-governance-changes
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| RBS investors call for governance changes to improve transparency RBS investors call for governance changes to improve transparency | |
| (about 4 hours later) | |
| About 160 investors are calling for the Royal Bank of Scotland to shore up corporate governance by creating a shareholder committee to sniff out “poor stewardship”. | About 160 investors are calling for the Royal Bank of Scotland to shore up corporate governance by creating a shareholder committee to sniff out “poor stewardship”. |
| The aim is said to be to avoid a rerun of the bank’s near-collapse in 2008. | The aim is said to be to avoid a rerun of the bank’s near-collapse in 2008. |
| The change would prevent a repeat of the chain of events that triggered the RBS’s crash during the financial crisis, according to the investor groups ShareSoc and the UK Shareholders’ Association (UKSA). | The change would prevent a repeat of the chain of events that triggered the RBS’s crash during the financial crisis, according to the investor groups ShareSoc and the UK Shareholders’ Association (UKSA). |
| Mark Northway, chairman of ShareSoc, said shareholders deserved a new approach that gave more effective input. “One objective is to stop the events that took place at RBS from ever happening again,” he said. | Mark Northway, chairman of ShareSoc, said shareholders deserved a new approach that gave more effective input. “One objective is to stop the events that took place at RBS from ever happening again,” he said. |
| “A dominant CEO, concealing the true financial position of the company from investors, proceeding with a reckless acquisition, and then publishing a rights prospectus which concealed the problems faced by the company. These are not examples of good governance.” | “A dominant CEO, concealing the true financial position of the company from investors, proceeding with a reckless acquisition, and then publishing a rights prospectus which concealed the problems faced by the company. These are not examples of good governance.” |
| In April 2008, RBS asked existing shareholders to inject £12bn into the company to strengthen its reserves after the bank had splurged £49bn to acquire the Dutch bank ABN Amro. The deal proved toxic and, just months later, the value of RBS shares plunged 90% and the government stepped in with a £45bn bailout. RBS remains 73% owned by the UK taxpayer. | In April 2008, RBS asked existing shareholders to inject £12bn into the company to strengthen its reserves after the bank had splurged £49bn to acquire the Dutch bank ABN Amro. The deal proved toxic and, just months later, the value of RBS shares plunged 90% and the government stepped in with a £45bn bailout. RBS remains 73% owned by the UK taxpayer. |
| John Hunter, the UKSA chairman, said there was a need for companies to step up and make capitalism work for everyone. | John Hunter, the UKSA chairman, said there was a need for companies to step up and make capitalism work for everyone. |
| “Most large shareholders are intermediaries who tend to act in their own interests and not those of the ultimate beneficial owners,” he added. “This needs to change and this proposal is a step towards that. Transparency and formal engagement will help to prevent poor stewardship.” | “Most large shareholders are intermediaries who tend to act in their own interests and not those of the ultimate beneficial owners,” he added. “This needs to change and this proposal is a step towards that. Transparency and formal engagement will help to prevent poor stewardship.” |
| ShareSoc and UKSA said poor management at RBS had caused shareholders to lose 95% of the value of their investment since the bank’s share price peaked in 2007. | ShareSoc and UKSA said poor management at RBS had caused shareholders to lose 95% of the value of their investment since the bank’s share price peaked in 2007. |
| The groups’ proposal was developed with Gavin Palmer, an outspoken RBS shareholder who interrupted the bank’s 2013 AGM to hand out a petition calling for a committee on the board. | The groups’ proposal was developed with Gavin Palmer, an outspoken RBS shareholder who interrupted the bank’s 2013 AGM to hand out a petition calling for a committee on the board. |
| It comes after reports that the RBS remuneration committee was discussing plans to cut the maximum amount chief executive Ross McEwan could earn under his long-term incentive plan from £3m to £1.75m as part of a review of executive pay. | It comes after reports that the RBS remuneration committee was discussing plans to cut the maximum amount chief executive Ross McEwan could earn under his long-term incentive plan from £3m to £1.75m as part of a review of executive pay. |
| The business secretary, Greg Clark, in November announced a new package of corporate governance reforms, which could require firms to make public the ratio between the pay of chief executives and ordinary workers, and provide seats for workers on company boards. | The business secretary, Greg Clark, in November announced a new package of corporate governance reforms, which could require firms to make public the ratio between the pay of chief executives and ordinary workers, and provide seats for workers on company boards. |
| RBS must now decide whether the proposal meets the correct requirements to face a vote at its annual meeting on 4 May next year. A spokesman for the bank said: “We have not yet received the final draft resolution. Once it has been delivered we will look closely to ensure that it complies with all corporate governance and listing guidelines.” | RBS must now decide whether the proposal meets the correct requirements to face a vote at its annual meeting on 4 May next year. A spokesman for the bank said: “We have not yet received the final draft resolution. Once it has been delivered we will look closely to ensure that it complies with all corporate governance and listing guidelines.” |