UNISON has joined forces with Unite and the TUC to launch Trade Union Share Owners – a new group which aims to put union values at the heart of corporate governance, with a new approach to the way in which their pension funds’ investments are voted on at company AGMs.
From now on at any AGM of a FTSE350 company where the UNISON, Unite or TUC staff pension funds hold shares, the group will work with shareholder advisory group PIRC to 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 have more than £1bn of assets between them.
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.”
The TUC hopes that more unions will get involved as they see a 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.
The trade union voting and engagement guidelines contain a variety of policy positions.
- 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.
