Tomorrow’s Company, a UK-based business-led think-tank issued a report, backed by activist investor Cevian Capital, calling for UK-listed companies to invite big shareholders to join their board nomination committees.
According to the report, Swedish shareowners play a direct role in selecting and sometimes removing board members. Nomination committees typically include four or five of a company’s biggest investors, company representatives and the board chairman, reporting their findings to the annual general meeting.
For such a system to work in the UK, or the US, if fund managers would need to get much more involved, recruiting and training people to serve on such committees as their representatives. (Lessons to learn from Sweden, FT.com, 3/28/10)
This reminds me of an idea that Bob Monks was pushing about ten years ago, shareholder advisory committees that “would consist of three paid representatives elected by the company’s largest institutional shareholders; it would be funded with a penny a share by the company itself, and have a right to meet with the company, propose candidates for director and publish its views annually in the proxy statement.” The Swedish version, now pushed by Tomorrow’s Company, appears more even more direct and promising. Let’s hope the idea gets further consideration.