Shareholder power

There’s a great example of shareholder activism going on at the moment at Tesco. The supermarket giant has its AGM coming up at the end of June, and under the Companies Act any shareholder with the support of 100 other shareholders, (with an average of at least 200o shares each) can get a resolution into the meeting. Ben Birnberg, of the War on Want organisation, has managed to drum up the support he needs, and the Tesco directors will be forced to ask their shareholders to vote on a resolution on ethical trading. Birnberg’s resolution calls for independent auditors to assess Tesco’s dealings with factories and suppliers in poorer countries, and would call them to account for worker conditions and low wages.
Of course, the shareholders might not want Tesco to be more ethical if it means lower returns for their investments, so it might be voted down. But it’s a neat use of our business frameworks to demand higher standards from big business, and force them to put fair trade issues on the agenda. I’m looking forward to seeing how it turns out.