LONDON (Reuters) - Britain’s biggest trade unions plan to use the shares owned by their pension funds to speak out in corporate governance debates at company meetings, amid public discontent at bumper payouts to corporate executives.
Union federation the TUC said on Monday it had set up a body to argue its views at shareholder meetings of UK companies in which its staff pension fund or the funds of its two largest members hold shares.
Trade Union Share Owners will work with shareholder advisory group PIRC to ensure a common voting position on behalf of the pension funds of the TUC, Britain’s biggest union Unite and UNISON, which represents public sector workers.
The TUC said it was concerned that fund managers for the pension funds do not reflect the views of scheme members when they vote on issues such as executive pay, board seats for women and transparency of recruitment for senior positions.
The three organisations will speak for assets worth more than 1 billion pounds. That is too small to have much real weight in shareholder votes, although the TUC said it was hoping more affiliated unions would join the initiative.
A rapid rise in boardroom pay at a time of dwindling real wages has made remuneration a hot political topic.
Last year, a number of high-profile shareholder votes against pay forced the departures of some well rewarded chief executives, including Sly Bailey of British newspaper group Trinity Mirror and Andrew Moss of British insurer Aviva.
“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,” TUC General Secretary Frances O‘Grady said in a statement.
Reporting by Chris Vellacott; editing by Laurence Fletcher and Jane Baird