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Seeking Tomorrow’s Investor
Last week saw the launch of an interesting new initiative looking at the corporate world from the perspective of an ordinary investor. The Tomorrow’s Investor project is being led by the RSA as part of its Tomorrow’s Business workstream and seeks to explore the largely passive nature of share-ownership as experienced by ordinary investors.
The RSA states: “Much of the money invested in company equities is held on behalf of ordinary citizens, often saving for retirement and other major life events. Yet it appears that many of those citizens have little consciousness of their role as owners.”
The project was launched last Thursday with a lively lecture and debate featuring some of the big names in the shareholder engagement world. A keynote presentation was provided by David Pitt Watson formerly of Hermes, with responses from personal finance journalist Jasmine Birtles, UK Social Investment Forum chief executive Penny Shepherd, and Paul Myners.
In the debate David Pitt Watson argued, in the line with the argument developed in The New Capitalists, the book he co-authored, that the extension of pensions and other funded savings had brought about a significant shift in the nature of ownership. The public now had a stake in the success hundreds of businesses. He said that in recent years there has been a shift in investor thinking, with more starting to play the ownership role and look seriously at environmental, social and governance issues.
Paul Myners was rather more skeptical. He argued that there had been little real change, with many large investors only paying lip service to their ownership responsibilities. He said that standards of trusteeship were still low, leaving trustees too reliant on their advisers. He was also critical of the record of socially responsible investment, arguing that it had very little impact on company boards, and he said that shareholders had failed to effectively control executive pay. On the last point he suggested that companies should consider linking directors’ pay increases to those of other staff within their own businesses, as a way to check unwarranted large increases.
The RSA has also produced a survey of its fellows to provide some headline views from ordinary shareholders. Amongst the findings were that the vast majority of respondents felt that public companies would benefit from greater investor involvement. 59% felt that ethical management needed investor input; 47% felt that this was the case with financial affairs.1
For more information visit:
http://www.thersa.org/projects/tomorrowsbusiness/ tomorrows-investors
