A quick plug for the annual proxy vote survey undertaken by SHARE plus the Columbia Institute and Fonds de Solidarite FTQ. This is one of several survey undertaken by labour-oriented groups worldwide to assist trustees in holding asset managers accountable for how they vote.
The PDF is here.
Saturday, 7 March 2015
Wednesday, 4 March 2015
Caledonia's sneaky Tory cash drop
Well this is interesting. It turns out that Caledonia Investments hasn't quite given up on using company money to fund the Tories after all. I speculated last June that they may have given up. My reasons for thinking this were a) they had made no donations since 2010 and b) they had not sought shareholder approval to do so since 2009.
This remains true, Caledonia has not sought shareholder approval to make political donations since July 2009 when almost 20% of shareholders voted against. As I understood it, because that authority was used (as donations were made during the subsequent 12 months) approval would needed to have been sought again to make further donations. As no authority was sought at the 2014 AGM (the last chance to do so before the election) it looked liked they weren't going to do it.
But then I spotted that Caledonia had indeed made a donation of £2,000 which was received by the Tories in mid December 2014, and looks like it has gone to the local party in Eastleigh, a key target seat to take from the Lib Dems. On the face of it this looks like it isn't permissible, but apparently there is a threshold for donations that require shareholder authority of £5,000 in any 12 months. Only donations over that amount require approval.
It doesn't look great does it? This is a company that knows that a) you are expected to seek shareholder approval for political donations and b) that its own shareholders do not like it making party political donations (as demonstrated by the July 2009 AGM vote). So it appears it has found a way to give the company's money to the Conservative Party without having to consult its shareholders and have a controversial vote. And this enables them to chuck a couple of grand into a key Tory target seat.
If you are a Caledonia shareholder, and/or a Lib Dem leaning corp gov type, you might want to have a look at this one. It looks to me like they are taking the mickey, and they might try and bung a few more quid over before the election.
This remains true, Caledonia has not sought shareholder approval to make political donations since July 2009 when almost 20% of shareholders voted against. As I understood it, because that authority was used (as donations were made during the subsequent 12 months) approval would needed to have been sought again to make further donations. As no authority was sought at the 2014 AGM (the last chance to do so before the election) it looked liked they weren't going to do it.
But then I spotted that Caledonia had indeed made a donation of £2,000 which was received by the Tories in mid December 2014, and looks like it has gone to the local party in Eastleigh, a key target seat to take from the Lib Dems. On the face of it this looks like it isn't permissible, but apparently there is a threshold for donations that require shareholder authority of £5,000 in any 12 months. Only donations over that amount require approval.
It doesn't look great does it? This is a company that knows that a) you are expected to seek shareholder approval for political donations and b) that its own shareholders do not like it making party political donations (as demonstrated by the July 2009 AGM vote). So it appears it has found a way to give the company's money to the Conservative Party without having to consult its shareholders and have a controversial vote. And this enables them to chuck a couple of grand into a key Tory target seat.
If you are a Caledonia shareholder, and/or a Lib Dem leaning corp gov type, you might want to have a look at this one. It looks to me like they are taking the mickey, and they might try and bung a few more quid over before the election.
Tuesday, 3 March 2015
More from the Future of Private Enterprise
Here's a further chunk of text from George Goyder's book setting out a good case for revisiting company law.
Second, we have obviously moved a long way from the position outlined - not surprising given that this was written 60 years ago! We have been through a prolonged period where policymakers have tried to breath life into the idea that shareholders 'own' companies, on the basis that this would be in everyone's interests. It hasn't worked out that brilliantly. Latterly they have tried to sketch out shareholders' responsibilities too, on a principles and voluntary basis in initiatives like the Stewardship Code and PRI, and something slightly different in cases relating to the OECD multinationals guidelines. One might argue that this is an attempt to patch up some of the holes caused by limited liability. But, in the UK at least, so far policy has been much more timid on trying to address this directly through company law.
The Companies Act of 1862, on which all subsequent Companies legislation is based, gave to shareholders something which does not in equity belong to them, namely the exclusive control of industry. Authority to direct industry met flow from responsibility. The Companies Act of 1862 by removing the unlimited liability of shareholders, did away with the only possible claim of the shareholder to exercise unlimited control over industry, a control which he is under no legal compulsion to share with anyone else.A couple of quick thoughts. First, it's noticeable that Goyder shares a lot of common ground with Tony Crosland about the lack of correspondence between company law and the reality within business. Crosland said company law was "upside down" in giving shareholders the whip hand. But whereas Goyder saw this as a serious fault to be rectified, Crosland didn't think it was worth bothering given that in practice everything was thrashed out between management and unions. With hindsight, it looks like Goyder was better on that point.
Handicapped as it is by an outworn and defective legal structure, the industrial system works as well as it does only because it is administered by able men who have to make the best of the system as they find it. The director is acutely aware that the company has responsibilities to others besides the company's shareholders. But the directorate is hindered from entering into full co-operation with the worker, the consumer and the community, because its primary and sole legal obligation is to the shareholder, and the shareholder's sole concern is with the financial stability and profit-earning capacity of the undertaking. We have established in industry, by our present company law, a fundamental conflict of purpose which vitiates the exercise by the directorate of its true function of balancing the claims of the four parties to industry in the pursuit of an agreed industrial directive.
Second, we have obviously moved a long way from the position outlined - not surprising given that this was written 60 years ago! We have been through a prolonged period where policymakers have tried to breath life into the idea that shareholders 'own' companies, on the basis that this would be in everyone's interests. It hasn't worked out that brilliantly. Latterly they have tried to sketch out shareholders' responsibilities too, on a principles and voluntary basis in initiatives like the Stewardship Code and PRI, and something slightly different in cases relating to the OECD multinationals guidelines. One might argue that this is an attempt to patch up some of the holes caused by limited liability. But, in the UK at least, so far policy has been much more timid on trying to address this directly through company law.
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