Royal Bank of Scotland (RBS) received another blow this morning, as private investors' group ShareSoc has published an open letter to complaining that the bank is turning a blind eye to shareholders.
The letter, signed off by ShareSoc director Cliff Weight, also chastised RBS for its conduct over the Financial Conduct Authority's investigation into its controversial restructuring arm, saying the bank had focused on “legal arguments and delaying tactics”.
ShareSoc criticised RBS for its refusal to consider establishing a shareholder committee, which it said would “facilitate more effective oversight and influence by shareholders over the governance of the company”.
“You fought tooth and nail, using flimsy, expensive, intransparent legal arguments to avoid putting a perfectly reasonable shareholder resolution [on establishing a shareholder committee] to your members,” wrote Weight.
At the time, RBS chairman Howard Davies said that it would be unwise to create such a committee since government reforms to corporate governance advice were still in flux.
The point was part of a wider concern from ShareSoc that RBS has sidelined corporate governance improvements.
ShareSoc said RBS had initially “responded positively” to the government's green paper on corporate governance, but had then set up a “toothless chat shop” to avoid making any substantive changes.
It added that the bank had over-emphasised the importance of non-equity stakeholders, such as employees and customers, “to the extent that shareholders might reasonably wonder whether the RBS board is really working for them at all”.
Allegations also emerged that RBS has been treating major shareholders more favourably than smaller investors, which would contravene legislation on shareholder rights. ShareSoc claimed that RBS sent institutional investors details of proposed remuneration arrangements, but declined to send copies to ShareSoc.
But a spokesperson for RBS responded: "We have been consistently clear in our support for enhanced corporate governance and, in particular, stakeholder engagement.
We are actively participating in the government’s ongoing consultation as well as building upon our established channels for engaging with shareholders.
The bank's third quarter results are due tomorrow.