Investors

Will shareholder activism catch on here as it has in the US? It could, but it seems unlikely. Why? Firstly more US citizens own shares privately than is the case in the UK. Also the US has a devolved and participative constitution. Putting down a shareholder resolution isn't that different from putting a resolution to the town meeting. Three groups are associated with US shareholder activism: the little guy, churches, and public sector pension funds. Often resolutions to tighten control of boards come from single investors and have the flavour of the little guy trying to get even. The US has much higher levels of religious observance and consequently more church-based institutional investors committed to promote business ethics. Similarly the governance of public sector pension funds makes them more susceptible to member pressure. These factors are all weaker in the UK. The UK could go the US route, but it will be an uphill struggle for the activists!