Investor group to take second run at establishing shareholder committee at RBS

Bosses at still 73 per cent taxpayer-owned Royal Bank of Scotland are to come under renewed pressure to set up a shareholder committee.

An influential investors’ group, which had a previous push to shake-up the corporate structure of the Edinburgh lender rebuffed at its last annual meeting in May, says it will now make another run at the bosses.

ShareSoc’s call to have a resolution to establish a shareholder committee in May was dismissed by RBS chairman Sir Howard Davies who claimed the bank had been advised by lawyers that such a move was incompatible with company law and against its constitution.

However, the bank’s resistance was met with such anger from shareholders that ShareSoc has been encouraged to continue its campaign.

The investors’ group has now said it is mustering its 4,000 members to make a second push and it says the response has been overwhelmingly positive.

And it has also written to members of the UK Shareholders Association to generate support for a resolution that would require more than 50 per cent of investors to vote in favour for it to be passed.

Cliff Weight, director and campaign manager at ShareSoc, who agues that a shareholder committee would provide a “structured, systematic, formal programme of interaction with representatives of key shareholders”, said: “This year, we are hoping RBS will engage with us and work constructively in developing an improved corporate governance framework. Since ShareSoc first engaged RBS in December 2016, there have been several positive developments which we recognise and applaud, but there remains much more to be done on shareholder democracy.”

In May, ShareSoc claimed RBS bosses had chosen to “hide behind the lawyers” and the investor group says it has now designed an approach aimed to counter what it called the “trivial legal objections previously raised by RBS”.

Mr Weight said the wording of the new resolution addresses the “legal nonsense” which would only be spotted “if you were a lawyer dancing on a pin”.

But while Mr Weight is prepared to concede the that the renewed campaign may well fall short again, he remains adamant that the bank is only postponing the inevitable.

“This is a war, not a battle,” he said. “It takes a long time, sometimes, to persuade people your logical arguments are sensible and correct.”

Reacting to ShareSoc’s announcement, an RBS spokeswoman said: “We have been consistently clear in our support for enhanced corporate governance and, in particular, stakeholder engagement. We have had a number of constructive meetings with ShareSoc during 2017 and will consider any valid request in respect of a resolution ahead of next year’s AGM when received.”