This story on the Beeb is interesting, as it demonstrates the limited nature of shareholder 'democracy' in the UK. TV chef Hugh Fearnley-Whittingstall is trying to file a shareholder resolution st Tesco's AGM, but the company is trying to make him pay £86,000 for printing and distribution costs.
It's already difficult enough for investors to file a resolution in the UK. If you haven't got 5% of the issued share capital you have to have 100 shareholders holding an average of £100 each to be able to file. Not many investors get up to the 5% threshold in any company, and the ones that do are mainstream asset managers who are extremely unlikely to file a resolution, ever. Even a large group of pension funds would struggle to get a resolution filed, so that means you have to go down the 100 individual shareholders route.
Even then the company can make you pay for printing and distribution costs relating to your resolutions if you file after the end of the financial year. But what if the issue you want to address has occured after the end of the financial year? Or what if you want to engage with the company before filing? The whole system is set up in a way that does not enfranchise shareholders who want to file a resolution, and it ought to be reformed. Why not simply drop the ownership threshold to say 1%?
I hope the Tescos resolution goes ahead, but I wouldn't bet £86K on it happening to be honest.