ABI disputes Myners’ plan for investors
INVESTOR bodies last night launched a fresh attack on City minister Lord Myners, following his suggestion that shareholders should be able to buy and sell their voting rights.
The comments from Myners are the latest in a string of radical proposals designed to increase shareholder power.
“Some shareholders who never vote could sell their voting rights to others who do want to vote,” Myners said.
“That would introduce market discipline into voting. It would have to be limited. Voting could not go beyond two votes per share, say. It is quite complicated, but it’s got merit.”
But last night the director of investment affairs at the Association of British Insurers (ABI), Peter Montagnon, hit out at the plan.
“Lord Myners is right to be asking what can be done to make companies more accountable to their shareholders, but this course is not the right one,” he said, adding the government had not in the past helped to foster long-term ownership interests in UK companies.
The ABI believes argues that the economic benefit of long-term share ownership for institutional investors has been hit badly by new regulations, solvency requirements and changes to taxation.
“We need to look more at long-term incentives for investing,” Montagnon said.
Earlier in the day, Myners urged Sir David Walker, who is leading the government’s inquiry into corporate governance, to consider the move as part of a wide range of options aimed at making big business more accountable to investors.
Myners has also previously suggested weighting shares to prioritise long-term shareholders over institutions such as hedge funds, which often enter and exit companies rapidly.