The number of do-it-yourself investors in Interactive investor The platform that voted on shareholder decisions soared after the company automatically joined all of its customers to a voting and information service.
The change is likely to embolden activists who have campaigned for greater participation of retail savers in shareholder votes, including on corporate pay, strategy and environmental, social and governance (ESG) issues.
The UK’s second-biggest fund supermarket said it processed 48% more votes on shareholder resolutions in the first half of the year compared to the previous year. However, the 134,000 votes still represent only 16% of the decisions its customers could have considered.
The company said the push for voting after it moved all of its clients to the voting system last fall shows how the financial services sector can do more to encourage individual shareholders to exercise their power over corporate decisions.
Previously, II customers had to opt in to the voting system.
Richard Wilson, the chief executive, said the increase in participation helped debunk the theory that do-it-yourself investors simply don’t want to vote at company meetings.
“Many private investors want to vote, and they are growing in number. Not all decisions will arouse interest, but some of them have an impact, from climate goals, senior salaries to fair treatment of employees,” he said.
Wilson said it is important that companies “remove unnecessary barriers to voting” and use technological solutions to allow small shareholders to express their opinion.
Large institutional shareholders, such as asset managers and pension funds, already exert their influence as major owners of companies to shape corporate policy, and have become more active in recent years around issues such as climate change, diversity and executive pay.
In contrast, many private individuals do not vote on major decisions in the companies in which they are shareholders, put off by the complex paperwork that is often involved and the sense that individual voices have little control.
Which consumer group? He said this month that “many investors are actually excluded from investment platforms with a complex and boring voting process.”
Some investment providers such as Interactive Investor have tried to make the process easier, using technology systems that allow investors to view information and vote more easily online. In the UK, politicians and the financial services sector are trying to increase the participation of retail investors in the capital markets.
The share of those who actually have the right to vote by II customers increased from only 6% in the first half of 2019 to 11% last year. This year’s figure of 16 percent still shows that the vast majority of votes are not used.
Consultant Lang Cat last year praised Interactive Investor’s moves to drive clients toward voting. “Exercising shareholder rights by voting and attending general meetings is a crucial part of owning investment companies,” analyst Chris Bardin said at the time.
The two annual general meetings that attracted the most attention this year from clients 2 were Lloyds, which is facing a dispute over executive pay, and oil major BP, which is under pressure to transition away from fossil fuels.
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