Pushing for the Living Wage, shareholder-activist style

4:58 pm - May 11th 2011

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contribution by Suitpossum

Last week Boris Johnson announced the new Living Wage to be £8.30 for London. The Living Wage campaign is now its tenth year, but progress remains slow.

One way to speed up the campaign is through shareholder activism, buying a share and attending the annual general meeting of a company to raise the issue. This is exactly what I did this week.

I attended the Centrica AGM on behalf of advocacy group FairPensions, to see if the board would be willing to commit to the Living Wage. Centrica run British Gas, and they have a large number of employees in lower salary brackets, for example, the call-centre staff.

You’re playing to a tough crowd when you do shareholder activism. Think about who actually attends a three hour meeting starting at mid-day: Most are loyal supporters of the company and many are former employees, now retired.

So my strategy was as follows:
1) Wear a smart suit,
2) drop in Boris Johnson’s name to deflect left-wing status,
3) suggest the Living Wage is becoming recognised as an important mark of commitment to Corporate Social Responsibility, and that, as such, it’s an important business decision, and
4) that as a shareholder, I believe it to be an issue which needs to be carefully assessed by the board.

Those should prevent you from being seen as a raving radical quack, and forces a serious response from the board. Unfortunately, it doesn’t guarantee you anything of substance.

In his response, Chairman Sir Roger Carr gave a true politician’s answer, asserting that the company paid more than the minimum wage, whilst avoiding direct mention of commitment to the Living Wage.

There was a tea afterwards, in which the directors mingled with the shareholders. I used it to chat to three of the directors, including the head of the American business. Treat them with respect and they’re forced to do the same back. He assured me the Living Wage issue would be brought up at their next CSR meeting.

Shareholder activism is but one method of affecting change, and it has its limitations, but it can be a surprisingly effective way to get up close and personal with senior management of the world’s largest companies.

Suitpossum is an independent financial consultant and writer. He blogs from www.suitpossum.blogspot.com and tweets from here.

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Reader comments

Well done.

Seems a sensible way to do things. You got your point heard, and were able to address it to directors. Not radical or showy (albeit I think the need to deflect from the fact you were left-wing is misplaced – unless you stand up and announce ‘I am a Marxist’ people will hear the idea first and your political identity second).

3. Shatterface

I think this is great idea compared with the idiotic stunts usually proposed.

So it boiled down to behave sensibly and if put your point across in a coherent and common sense manner then people will listen to you.

Only in the “throw things and sulk” lobby would that be considered newsworthy.

5. Chaise Guevara

@ Ianvisits

…And how are things in the “sneer at anything constructive anyone else does while never contributing anything yourself” lobby?

6. Mr S. Pill

@1, 2, 3, 4

Let’s not count any chicken before they’re hatched, eh? Yes, this meeting appears to have gone well and yes, shareholder activism is to be encouraged… but without any firm results you can’t automatically applaud & say it’s better than X Y or Z – the key (I believe) is to use all available tactics in tandem.

That said, kudos to the OP for a job well done (so far!).

7. Chaise Guevara

To clarify, Larry:

Obviously you disagreeing with the festival does not directly hurt anyone’s freedom of speech. Apart from anything else, you have the freedom of speech to express that opinion.

However, the opinion you happen to be expressing is a mildly anti-freedom-of-speech one, and I happen to disagree. If I said that all people called Larry should be silenced, the actual act of me saying it would not harm your right to freedom of expression. However, you would be quite right to see it as a censorious viewpoint and to criticise me for it.

8. Chaise Guevara

[Apologies, wrong thread, I’m a moron]

Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Pushing for the Living Wage, shareholder-activist style http://bit.ly/iVGxqa

  2. dhugoza

    RT @libcon: Pushing for the Living Wage, shareholder-activist style http://bit.ly/iVGxqa

  3. James Mills

    RT @libcon: Pushing for the Living Wage, shareholder-activist style http://bit.ly/iVGxqa

  4. Hallucigenia

    how buying one share can lead to fairer wages for the worst paid staff http://bit.ly/j4N7TJ

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