M&S’s Archie Norman: I’m on mission for investors

Marks & Spencer chairman Archie Norman is spearheading the most high-profile campaign for popular capitalism since the 1980s’ ‘Tell Sid’ privatisations.

Norman, one of the best respected bosses in corporate Britain, has written to Business Secretary Kemi Badenoch asking for amendments to company law to boost shareholder democracy.

His ‘Share Your Voice’ campaign is supported by the Quoted Companies Alliance, which represents 1,000 mid-sized and small businesses listed on the stock market.

Other backers include the UK Shareholders’ Association, a lobby group for small investors, and ShareSoc, which represents the interests of individual investors.

The most radical reform being proposed is for digital annual general meetings for shareholders to be recognised as valid.

Under current rules, companies must declare a bricks-and-mortar venue for their AGM and have two or more shareholders physically present. As a result, a meeting that consists of ‘a pair of men in a shed in the Outer Hebrides is valid’, whilst one with ‘over 200 investors convened via secure online technology is not’, Norman says in his letter.

The campaign also aims to improve the links between companies and small shareholders who use nominee accounts, where their holdings are pooled with those of other savers. These are a popular and low-cost way of holding shares, but companies do not know the identity of nominee investors and cannot communicate with them directly.

James Ashton, chief executive of the Quoted Companies’ Alliance, said: ‘It is astonishing that despite the UK’s laser focus on good governance, listed companies still don’t know who many of their shareholders are and can only discover them at great expense. With the London market losing one public company a week, it is imperative to modernise investor relations so corporate costs can be driven down and retail investors better engaged.’

Companies are able to hold ‘hybrid’ physical and virtual meetings but a purely digital event is currently invalid under corporate law. ‘It is madness,’ Norman says, that meetings ‘are not keeping up with the digital way the world now works’. Any move away from the traditional AGM, where shareholders can confront the board in person, will be opposed by some. They are also often a stage for protests.

And for some shareholders, the meeting is a social occasion with free food and drink.

Norman argues these factors are outweighed by the advantages of a digital meeting, which would be accessible to far more shareholders, including those who live far away. M&S has been holding hybrid meetings since the pandemic. In 2019 its old-style gathering was attended by 561 people, compared with 1,700 shareholders who logged on to its digital meeting last year.

Overall, across the market, attendance at AGMs was down 55 per cent in 2022 and recent research has found that 53 per cent of shareholders do not attend because of the travelling.

Norman wants communications with shareholders – still mainly conducted through print and postage – to enter the digital age. He said: ‘Banking statements, credit agreements, gas and energy bills, retail receipts and even football tickets have all now shifted to a digital-first process.’

He wants digital as the default procedure and to require investors to provide an email address before buying shares. Each paper mail-out to shareholders at Marks & Spencer costs £100,000.

Millions of people are still thought to hold paper share certificates, including for holdings they inherited or bought in the 1980s privatisations, when an advertising campaign used the slogan ‘Tell Sid’, urging the public to buy shares in British Gas. But their numbers are falling.

A review by lawyer Mark Austin proposed digitising share certificates, and City grandee Sir Douglas Flint is leading a digitisation taskforce.

Last night, Marks & Spencer denied speculation it is planning hundreds of head office job cuts. A spokesman said that the figure is ‘simply inaccurate’.