date: 25 March 2013
embargo: 00.01hrs Tuesday 26 March 2013
The TUC and its two largest affiliated unions, Unite and UNISON, are today (Tuesday) launching Trade Union Share Owners - a new group which aims to put union values at the heart of the world of corporate governance, with a new approach to the way in which their investments are voted on at company AGMs.
From now on at any AGM of a FTSE350 company where either the TUC staff pension fund or those of its two biggest unions hold shares, the group will work with shareholder advisory group PIRC to ensure that their funds take a common voting position in accordance with a new set of policy guidelines drawn up by the TUC.
Covering such issues as the membership of boards, the advertising for new director posts and the level of top directors' pay and bonuses, the TUC guidelines and Trade Union Share Owners are being launched later today at PIRC's annual corporate governance conference in the City.
The three organisations will start out with over £1bn of assets between them and the TUC hopes that many more of its affiliated unions will want to get involved in the coming year, as they see this new, co-ordinated approach as an effective way of getting workers' voices heard in company boardrooms.
The new voting and engagement guidelines have been drawn up to ensure that corporate governance policies that unions have long been critical of - all-male boards, excessive director pay and bonus packages, and the non-advertisement of new director positions - will be challenged by union voting at company AGMs.
The TUC has long been concerned that when fund managers of union pension funds vote on remuneration reports at company AGMs, they often do not reflect the views of the ordinary people whose money is being invested. This is something that the TUC's Fund Manager Voting Survey has highlighted over the last decade.
In an attempt to bring a more common sense approach to directors' pay and the make-up of company boards, the three organisations will be using the voting and engagement guidelines to ensure that wherever their money is being invested, any votes are a genuine reflection of their views and of the ordinary members of the three pension schemes.
Commenting on the new guidelines and the shares initiative, TUC General Secretary Frances O'Grady said: 'This initiative represents a new approach to tackling corporate irresponsibility for unions. From now on the TUC, Unite and UNISON will be voting in line with our values at company AGMs. Our doors are open to all unions and other organisations who want to join us to bring about a change in the way corporate Britain runs itself.
'The UK's families might be struggling to cope with the biggest squeeze on their incomes in living memory, but that hasn't discouraged top directors from awarding themselves austerity-busting pay and bonus packages worth millions.
'It's time to inject a long overdue dose of reality into British boardrooms and we are going to use the power of our pension funds to make a difference and to encourage a new and more responsible corporate Britain.'
UNISON General Secretary Dave Prentis said:'I am very pleased to announce the participation of UNISON's staff pension fund in this new labour movement initiative.
'Unions are all about collective principles and action to enable progress and tackle inequity. Now we can demonstrate this with our collective investment power. We will be active shareowners of FTSE companies, in the interests of our scheme members and other stakeholders in the companies our funds own. We will be modern, responsible investors.'
Unite General Secretary Len McCluskey said: 'Unions must use all the means at their disposal to fight for social justice. This is why Unite and its sister unions are launching this share owners initiative. Trade union values of decency and fairness ought to be present in the boardroom, but if we cannot trust that they will be then we need to use our share ownership to influence corporations.
'All too often, business takes decisions that are bad for this country and its people. Last week, just as the Chancellor was demanding more austerity from working people, Barclay's executives rewarded themselves share fortunes worth £40 million.
'This is a clear reminder that corporations need to be forced to behave responsibly. Unite will now be doing just that by putting our values at the heart of corporate governance.'
The trade union voting and engagement guidelines contain a variety of policy positions including:
- Moves to limit the growing gap in the pay of those at the very top and bottom of companies, with the aim of achieving a 20:1 pay ratio, and for pay increases to directors to mirror those being offered to ordinary employees.
- Persuading all companies to become living wage employers on the basis that decent wages lower staff turnover and absence rates, and lead to a more motivated, productive workforce.
- Encouraging companies which are keen to include worker representatives in their corporate governance structures.
- At least a quarter of the board positions to be held by women.
- All board vacancies to be advertised, rather than people simply being invited to join.
- A limit to the number of board positions that directors can hold. Where individuals are unable to devote enough time to their role their re-election should be opposed.
NOTES TO EDITORS:
- The trade union voting and engagement guidelines are available here www.tuc.org.uk/Trade_Union_Voting_and_Engagement
- The PIRC annual corporate governance conference takes place on Tuesday 26 March at the Grange Tower Bridge Hotel, 45 Prescot Street, London E1 8GP. Speakers include Assistant General Secretary Kay Carberry, ex-head of Hermes Focus Funds David Pitt Watson, tax campaigner Richard Murphy, and the Independent's Consumer Affairs Correspondent Martin Hickman.
- All TUC press releases can be found at www.tuc.org.uk
- Follow the TUC on Twitter: @tucnews
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: [email protected]
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: [email protected]
Alex Rossiter T: 020 7467 1337 M: 07887 572130 E: [email protected]
Issued: 26 March, 2013