RBS snubs shareholder committees

Royal Bank of Scotland (RBS) has announced that it will not create a committee specifically designed to represent the interests of its shareholders.

The still 73 per cent state-owned lender made clear its stance on the matter amid ongoing consultations on corporate governance reform and in response to the government’s Department for Business, Energy and Industrial Strategy (BEIS).

The bank said it will continue to “contribute to industry feedback” on the Green Paper on corporate governance reform from the BEIS, which has been looking at the issue in the wake of the 2008 financial crisis.

While ruling out shareholder committees, RBS said it supports the introduction of formal stakeholder engagement panels, which will allow directors and senior executives to hear directly from a range of key stakeholders, including employees, customers, suppliers and others with an interest in how the company is performing and operating.

In a statement, the bailed-out bank said: “RBS envisages the members of its Sustainable Banking Committee taking the lead in stakeholder engagement as ‘stakeholder supporters’.

It added: “The bank continues to contribute to industry feedback on the Green Paper, which will address each consultation question posed and explore the more technical considerations connected to the proposals.

“Having taken legal advice, the RBS Board has taken the decision not to take forward a proposed AGM Resolution submitted by ShareSoc and UK Shareholders’ Association (UKSA) that called for the creation of a narrower ‘Shareholder Committee’.”

RBS Chairman, Howard Davies, said: “Acknowledging past mistakes and recognising the part that RBS must play in reform, we continue to develop our culture and priorities. Having looked closely at how we can improve and build upon existing arrangements at board level, we believe that RBS would benefit from strengthening the voice of our employees, customers and wider stakeholders.

“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.”