Of course, this idea should warm the cockles of our hearts here at Investors Chronicle. In theory, yes. In practice, get real: the project of attempting to marshal the proxy votes of many small shareholders is not one that a sensible person would grasp with both hands.
What resource will be required to receive and record the votes being offered? Exactly how are the proxies to be given? How readily will self-invested personal pension (Sipp) and individual savings account (Isa) managers accept us as proxy holders? How will the line on voting at any individual general meeting be established? What happens if the small shareholder sells his shares between giving us his proxy and our exercising it? We have been mulling over these complications for several months. And the conclusion, incorporating not a little trepidation, is to give it a go.
The arrangement as we envisage it presently is that shareholders who would like us to exercise their proxies will send us a spreadsheet of their shareholdings together with a simple statement appointing "The Proxy Committee of the Investors Chronicle Editor" to vote on their behalf. This committee will have a revolving membership depending on the issues under consideration. However, it will always be chaired by our editor and I expect I will chip into it pretty regularly.
We will not, at least initially, exercise the votes offered on every possible occasion - far from it. As we expect that quite a lot of effort will be required to carry out a proxy vote, we will only vote at selected meetings where a clear matter of principle is under consideration. In these cases we will advise our proxy-givers via the magazine and website how and why we are voting their shares. We will not seek approval for our stance on individual votes - that would be far too complicated. The proxy will give us absolute discretion about how we vote. However, it will be capable of being retracted at any time if you disagree with the line we are taking with your votes.
Are you up for this? We're hoping to enlist 50 readers for a test run. Don't send us your shareholdings or your proxies yet. And don't, whatever you do, send anything by post! If you'd like to take part, please email icprox@pobox.com the following information: your name, address and phone number, an indication to the nearest £50,000 of the value of your portfolio, the approximate number of FTSE 100 companies in which you hold shares, how many nominee accounts you have, and finally, whether you typically hold shares for under or over one year. Naturally, we confirm that this data will be kept private. Please keep your email simple and to the point, because someone may end up having to sift through several hundred of them.
To keep things as simple as possible at this end, for the trial run, we will select 50 readers who own a preponderance of FTSE 100 shares, have fewer rather than more nominee accounts and tend to hold their shares for longer periods. Once we have identified these readers, we will be in touch to make further arrangements. If we do not get back in touch with you, we will record your interest to follow up if and when our test run proves successful.
We're focusing on FTSE 100 companies because we expect those to be the most commonly held among our readers and because they are the poster boys. While we might achieve a greater impact in individual cases by focusing on smaller companies, we don't want this to act like a single company shareholder action group. We want this proxy initiative to provide a broad platform in favour of sound corporate governance principles in all companies on behalf of smaller investors.
We are therefore quite likely to vote against remuneration committee reports and we're not too keen on the routine reappointment of auditors either: their relationships with management are far too cosy. If these are your values, but you are daunted by the task of putting them into action, this could be your moment.
