More than 100 London-listed companies, including AstraZeneca and Pearson, will be named on a new public register exposing investor revolts over pay and corporate governance failings.
Sky News can reveal that the Investment Association (IA), the trade association for Britain’s vast fund management industry, will this week begin writing to companies which saw at least 20% of shareholders oppose resolutions at this year’s annual general meeting.
The letter will be the first tangible evidence of the crackdown on boardroom excess announced by the Government in August and which was a cornerstone of Theresa May’s early pitch as Prime Minister to tackle inequality and economic injustice.
The IA, which is still sifting through data relating to the 638 companies in the FTSE All-Share index, will initially circulate its letter to more than 100 boards which have been on the receiving end of big shareholder revolts.
They will include some of the biggest businesses in the UK, such as Burberry, the fashion brand, Crest Nicholson, the housebuilder, and Entertainment One, the film and television content group.
While the information included on the register is already publicly available, the Government believes a more glaring spotlight being shined upon it will force boards to behave more responsibly.
A copy of the warning to companies that they will be included in the register – which will be launched by the end of the year – was given to Sky News by the trade body on Wednesday night.
In it, Andrew Ninian, the IA’s director of stewardship and corporate governance, will call for recipients to make public statements about how they intend to address the concerns raised by the substantial opposition to their AGM motions.
The new register will include, but not be restricted to, companies which have seen big rebellions over boardroom pay.
It will also name businesses which have withdrawn resolutions that were to be put to investors, and those which saw at least 20% of shareholders voting against individual directors or any other AGM resolutions.
That appears to represent a widening of the register’s scope, which in August was hailed by the IA solely as a mechanism for naming and shaming listed companies over excessive remuneration.
Analysis by Sky News of 2017 AGM voting outcomes suggests that a significant number of the sizeable revolts related to matters other than pay.
The initial crop of more than 100 companies appearing on the public register will not be the final tally, suggesting that around 20% of the constituents of the FTSE All-Share index could be named in it.
Speaking to Sky News, Mr Ninian said: “Shareholders want to understand whether and how companies are acting on their concerns.
“We are now contacting those companies that will appear on the public register so that they can provide a public response on the actions which they have taken to address shareholder concerns.
“This next step is key to providing greater transparency and holding businesses to account.”
Sources said that Greg Clark, the Business Secretary, would welcome the IA’s move to kickstart the register on Thursday.
The register will form part of a broader package of corporate governance measures announced by the Government.
Others include a requirement to give employees a stronger voice in the boardroom and the establishment of a new governance code for large private companies.
Pay rows at companies including BP, criticism of working practices at Sports Direct International and the collapse of BHS have all contributed to a growing desire in Westminster for corporate misbehaviour to be curtailed.