RBS shareholders recommend committee to improve corporate governance

30th Dec 2016 10:24

(ShareCast News) - Royal Bank of Scotland has reportedly been asked by more than 160 investors to create a committee of shareholders to improve its corporate governance in order to shield the bank against another financial crash.Shareholder groups ShareSoc and UKSA will submit the proposal at the bank's next annual meeting in May, Reuters reported.The aim is to improve the lender's position for long-term investors who have seen RBS shares drop more than 95% since their 2007 peak.Shareholders are trying to bolster the representation of individual retail investors in how the bank is run in order to avoid a repeat of the mistakes that led to the bank's bailout during the 2008 financial crisis."A dominant CEO; concealing the true financial position of the company from investors; proceeding with a reckless acquisition; and then publishing a rights prospectus which concealed the problems faced by the company," Mark Northway, Sharesoc Chairman, said in describing the mistakes.RBS could not immediately be reached for comment. The proposal needs the backing of at least 75% of shareholder votes at the meeting.The government, which holds 71% of shares, would need to support it or abstain for the resolution to pass.A spokesman for UKFI, which manages the government's holding, declined to comment on how it will vote.The news comes as RBS continues its restructuring, which includes selling off assets, job cuts, settling litigation and paying regulatory fines for past wrongdoings.