ii reports 48% jump in shareholder votes processed in first half of 2022

Rise in private investors making their voices heard at AGMs, including Lloyds Bank, Aviva and BP.

• Thought-provoking data for industry 
• Lloyds, BP and Aviva the most-voted shares on ii in H1

Latest data from interactive investor, the UK’s second-largest investment platform for private investors, shows a significant jump in voting in the first half of 2022. 

The increase comes just months since ii switched on all customers to its free voting service. The data should make thought-provoking reading for the financial services industry.

The number of votes processed on interactive investor in H1 2022 was up 48% on H1 2021, with 133,997 votes processed. 

This dramatic increase is no happy accident and demonstrates what can be achieved when investment platforms remove barriers and red tape. 

In November 2021, interactive investor automatically opted in customers to its voting and information service. Previously customers had to proactively opt in, and they can still opt out if they wish.

Richard Wilson, CEO, interactive investor, says: “When you remove unnecessary barriers to voting, you help create change. And in a world where technology provides simple, time-saving solutions, it’s important we use it.

“The proof is in the pudding. Plenty of private investors want to vote, and they are growing in numbers. Not all resolutions will spark an interest, but some are impactful, from climate goals, executive pay through to fair treatment of workers. 

“But it’s not for us to decide what’s important – investors must make that choice for themselves. It’s early days and there’s more to do, but this data shows the potential that private investors can have to affect change. And it’s hugely encouraging.”

The data also shows a significant increase in the percentage of votes used on interactive investor in an environment where too many private investor votes have historically gone to waste. 

Looking at H1 comparisons, the numbers have risen from 6% in 2019, 8% in 2020, 11% in 2021, and 16% in 2022. 

The investment trust sector has long been keen to address the issue of wasted retail votes, given its wide ownership by private investors. When few private investors turn out to vote, large institutions can take a disproportionate share of voice - and they might not always have everyone’s best interests at heart.

That’s one reason why interactive investor does not cherry pick the votes it alerts its customers to. An investment trust continuation vote or policy change, for example, could easily go under the radar, but is important. So, there is no cherry-picking from us.

Number of votes processed overall in H1 from 2019 – to 2022

The popular votes

FTSE 100 giant Lloyds Banking Group (LSE:LLOY) was the most-voted holding by number of votes processed, followed by BP (LSE:BP.) and Aviva (LSE:AV.). 

Lloyds’ Annual General Meeting (AGM) was dominated by its remuneration policy – a highly topical area for many AGMs this year - whereas the spotlight at BP’s AGM was firmly on its energy transition strategy, following pressure from Dutch activist group, Follow This, to accelerate its plans. 

Aviva’s AGM, which was held in person, also made the headlines following a shocking display of sexism towards its CEO Amanda Blanc – prompting an important discussion in the industry about acceptable behaviour at these meetings. 

Top 10 most-voted meetings of H1 2022

Note: there were two Aviva votes on the same day: one was an AGM, the other a vote on a capital reorganisation.

Lee Wild, Head of Equity Strategy, interactive investor, explains: “Our most-voted companies are the biggest, which is not a huge surprise given their size and profile, but the trend more broadly is very encouraging. In fact, it’s great to see private investors voting at these FTSE giants’ AGMs – after all, these meetings are usually the only time a company of a FTSE 100 company’s size and scale ever hears directly from an individual shareholder.

Watch your language

Exploring the barriers facing private investors when it comes to voting, ii conducted a flash poll on its website between 30 March – 01 April 2022 where over 1,000 people were asked what would make it easier to vote at AGMs. Over a quarter of respondents (26%) believed online investment platforms should step up and make it easier to vote. 

A further 26% of respondents felt that listed companies themselves need to start communicating better to help investors understand the issues: ‘more information on the resolutions themselves’, and ‘simpler language to make resolutions clearer’, got 16% and 13% of the vote, respectively. Some 6% said voting by app would make things easier.

It’s time for plain English

Recently, interactive investor took its campaigning a step further and called on the UK’s financial authorities to support private investors by introducing guidance on plain English matching that given by the US Securities and Exchange Commission.

interactive investor is urging organisations, including the Financial Reporting Council and the Financial Conduct Authority (FCA), to collaborate to produce a guide similar to that of the SEC’s A Plain English Handbook.

A rallying cry for the industry to do more

Lee Wild adds: “We will continue to do our bit at ii, but the wider industry needs to meet us where we are. We are still a long way away from creating an environment where private investor voting and engagement is the norm, and we need all parties to participate to drive this.

“Let’s not forget that companies, too, have a huge amount more to do in order to properly inform and engage their shareholders. Gone are the days, thankfully, where companies can get away with just paying lip-service to stakeholders. We’ve seen these companies becoming increasingly challenged on a public stage, and this AGM season has been the perfect example of that.”