LONDON (Reuters) - The number of British companies facing material dissent from investors at their shareholder meetings jumped in the first half of the year, with votes against individual directors doubling from 2017.
Ninety-four companies were added to the Public Register - which lists companies that saw opposition of more than 20 percent on any vote or which withdrew a resolution - in the year to June 8, trade body the Investment Association said.
The IA, whose members manage nearly 7 trillion pounds in assets, set the register up after a major review into corporate governance by the government last year, in the wake of growing discontent about corporate culture and behaviour.
At the midway point of the season for annual general meetings of companies in the FTSE All-Share index .FTAS, the IA said a total of 140 individual resolutions had seen votes against of more than 20 percent, while 14 were withdrawn.
Thirty-four companies faced director-related resolutions in that period, up 62 percent on a year earlier, while the number of individual resolutions with more than 20 percent votes doubled to 54 from 27.
“An emerging trend midway through this year’s AGM season is the increase in directors receiving high votes against their re-election,” said Andrew Ninian, director of stewardship and corporate governance at the IA.
“Directors are getting a very clear message from shareholders that they will be held accountable for their actions.”
Forty companies were added because of pay-related issues, compared with 35 who faced similar action at the same point a year earlier, although the number of individual resolutions that saw votes in opposition of at least 20 percent dipped slightly to 47 from 48, the IA said.
Crucially, said Ninian, companies were also doing more to explain themselves. Of those added this year, 74 percent acknowledged the vote and explained their planned response, up from 55 percent of companies in the prior year.
“The Public Register is shining a spotlight on companies subject to high levels of shareholder rebellion. After only seven months of operation, the increased scrutiny brought by the Public Register is clearly working,” Ninian said.
“We now expect these companies to follow up with a further statement within six months of their AGM, outlining the actions taken and views heard from their shareholders.”
More than a third of the companies added to the register in 2018 had faced similar issues a year earlier, the IA said, with 28 instances of companies flagged for the same resolution.
Reporting by Simon Jessop; Editing by Jan Harvey