Blog : BOARD TALK
|Posted on December 6, 2011 at 9:00 AM|
Institutional shareholders are (finally) starting to sound like they mean business when it comes to improving the UK's boardrooms.
First we had Legal & General Investment Management - which owns an average of 3% of every UK listed company - coming out to call for greater boardroom diversity - of age, nationality and skill set - with Sacha Sadan, its director of corporate governance saying : "It's not just about gender." Time to end the waffle. LGIM is going to be working with headhunters towards achieving this goal in its investee companies.
While LGIM has not voted against an executive for failing to diversify a board, it is now prepared to do so.
That's the thing about jumping on a 'banwagon' or a trend - it's very tribal : everyone watches and waits and then, at last, people decide that they need to take action ....and it snowballs. Live in hope, anyway.
And we have the Association of British Insurers (ABI) - the potentially powerful voice of about one-sixth of the UK's investors, writing to the major banks demanding "fundamental" changes in the way they award pay. The ABI has written to the five leading banks - Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered. It is demanding lower bonus pools and indidvidual awards.
And let's not forget Nick Clegg, the deputy prime minister, who has also decided to align himself clearly with the quest for real reform on pay. Perhaps - as well as focusing on better boardrooms, the City is about to begin to feel the chill of this 'winter of discontent.