The new £1bn (€1.2bn) Trade Union Share Owners (TUSO) initiative in the UK – formed earlier this year by union umbrella body the Trades Union Congress (TUC) and its two largest member unions – may look at focusing on the way company director vacancies are advertised in a bid to improve transparency in board appointments.
It is concerned that very few board positions are publicly advertised, which it says contributes to the fact that directors are generally drawn from a narrow range of backgrounds.
Speaking at the Local Authority Pension Fund Forum (LAPFF) Annual Conference recently, TUC Senior Policy Officer Janet Williamson said this is an area of focus for the group.
TUSO will vote against the chairs of companies’ Nominations Committees unless it is clear that board positions have been publicly advertised.
The group was formed by the TUC and the Unite and UNISON bodies in March this year, with input from governance advisory firm PIRC, to coordinate their voting at annual meetings and engagement with companies.
TUSO is following in the footsteps of similar labour union-linked bodies such at the CtW Investment Group in the US and the Vancouver-based Committee onWorker’s Capital in trying to coordinate union pension assets. TUSO doesn’t take a position on divestment, Williamson added.
The new group will ensure a “common position” at the AGMs of FTSE350 companies according to a new set of guidelines. It’s hoped that more union funds will join the scheme.
TUSO will vote against remuneration reports where top directors earn more than 20 times their average employees. It will also target companies where directors are offered pay rises that are out of line with other staff.
The body will also vote against remuneration reports where directors’ incentive pay exceeds 10% of their total remuneration and will only support incentive schemes that are open to all staff on the same basis.
The guidelines also cover a range of employment-related issues, including the paying the ‘living wage’ and supply chain management.
Williamson said TUSO provides a platform for unions to speak with one voice as shareholders, as well as being more efficient and cost effective. An early example has been its support of the International Brotherhood of Teamsters in its campaign against anti-union activity at Durham School Services, the US school bus operator that is a subsidiary of UK-listed National Express. Link