Trade union groups the Trade Unions Congress (TUC), Unison and Unite have teamed up to launch a group that aims to put union values at the heart of corporate governance on issues such as excessive directors’ pay.
Trade Union Share Owners will work with shareholder advisory group Pensions and Investment Research Consultants (PIRC) to take a common voting position in accordance with a new set of policy guidelines drawn up by the TUC at any annual general meeting of a FTSE 350 organisation where the TUC, Unison and Unite employee pension funds hold shares.
The three organisations have more than £1 billion in assets between them.
The new guidelines have been drawn up to ensure that corporate governance policies, such as levels of directors’ pay and bonus packages and all-male boards will be challenged.
The group hopes to bring a more common-sense approach to directors’ pay and the make-up of company boards.
The new group’s voting guidelines include the following policy positions:
- Moves to limit the growing gap in the pay of those at the very top and bottom of organisations, with the aim of achieving a 20:1 pay ratio, and for pay increases to directors to mirror those being offered to other employees.
- Persuading all organisations to become living-wage employers on the basis that decent wages lower staff turnover and absence rates, and lead to a more motivated, productive workforce.
- Encouraging organisations that are keen to include worker representatives in their corporate governance structures.
- Aiming for at least a quarter of board positions to be held by women.
Dave Prentis, general secretary at Unison, said: “Unions are all about collective principles and action to enable progress and tackle inequity. Now we can demonstrate this with our collective investment power.
“We will be active shareowners of FTSE companies, in the interests of our scheme members and other stakeholders in the companies our funds own. We will be modern, responsible investors.”