Wednesday, 21 May 2008

Unite plans investor campaign at Marks and Spencers

This is a very welcome development in the capital stewardship world. The UK's biggest union is planning to file a shareholder resolution at the M&S AGM calling on the company to deal with discrimination against agency workers in its supply chain. Any trustees reading might want to have a look, and prepare to ask your fund managers what they think about the issue. I'll post more on this as it develops. Release here.

Unite warns M&S of significant reputational risk

On the day M&S announces £1 billion in profit, Unite, Britain's biggest union, warns that it faces significant reputational risks as it continues to fail to address, what the union believes, is a pattern of structural discrimination in its UK and Irish supply chain.

The union intends to table a resolution at M&S's forthcoming AGM, calling on M&S to engage in a meaningful process involving all affected stakeholders to deliver equal treatment to all workers in the British and Irish supply chain.

The union also has concerns over the governance of M&S, as it believes the concentration of power within the hands of Sir Stuart Rose as chairman and CEO fails to conform to best practice, and may leave the company without adequate checks on Sir Stuart's influence. The union has already held meetings with other investors that share concerns about the company's corporate governance and ethical standards.

While M&S trumpets its commitment to sustainable and responsible investment, Unite has received complaints from employees of discrimination in the meat supply chain. A permanent two tier workforce amongst many suppliers has been created, which often leads to conflict between migrant and indigenous workers and causes community disharmony.

Unite joint general secretary, Tony Woodley, said: "M&S have made enormous profits, while we have had complaints from some workers in its supply chain who feel they are being forced to accept unequal treatment and discrimination. Sir Stuart Rose now faces the likelihood of a resolution being brought to the floor of M&S' forthcoming AGM which calls on the company to protect its brand by remedying the situation.

"Our belief is that there is a structural pattern of discrimination in the M&S supply chain and this is not only ethically wrong but also presents a significant reputational risk to the brand of M&S.

"We have raised this issue time and time again with M&S but the company is failing to take effective action. We are calling for an urgent meeting with Sir Stuart Rose to discuss the union's concerns. Unless this issue is addressed it could to do significant damage to the company's reputation with both investors and customers. "

Unite the union gave its evidence to M&S and the other major retailers more than a year ago. Despite talks and independent research which backed many of the workers' claims, M&S has failed to take effective action. Unite believes supermarkets should face up to their responsibilities to workers and communities. M&S should put its warm words into action, and start putting people first.

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