I read with interest and I am, like many, closely watching the shareholders revolution focused on boardroom pay.  Now the threat of legislation, along the Australian model of two strikes, is again being debated.  Perhaps this will make the old guard sit up and take note?

What we are not seeing discussed is the long term effect of such measures.  Large companies may seek to encourage investors from those countries where they are not fixated on boardroom pay.  Asia, India and America could benefit from this strategy at the expense of Europe and particularly the UK.  Those leaders taking up these key posts may be reluctant to do so unless the package is agreed upfront and includes a legally binding significant exit payment.  Surely this is no way to start a job – negotiating based on exit and not focused on performance?

How did we get here?  I don’t believe that it is solely down to the recession and the fact that investors are seeing less return on their investments.  Could it be in part down to complacency, a lack of external strategic focus and not employing people at executive level with the right skills in communications and engagement?  I have run both PLC and limited companies and have always seen and reaped the benefit of focusing on internal and external engagement.  It is my belief that boards need to be much more engaged than ever before on creating a proper informed dialogue with their investors and this includes the small independent shareholder. Too often I see boards and executives focus on the big investor institutions which have, in part, led to the smaller funder feeling neglected and isolated.

For those businesses that see this change of power, as the voice of the smaller stakeholder becomes more influential, the rewards will be great.  These organisations will not simply be looking to their legally/financially trained or regulatory-focused company secretary for support.  They will be recruiting strategic highly competent and experienced communications professionals to board positions and focusing the board agenda to assess levels of engagement and stakeholder/investor opinion.  They will see the single small investors as a strength and promote them as advocates.  After all properly informed and engaged they will be able to defend the organisation, speak out for the good work it does and even, I dare say, hold the board of the company they own as an example of one which deserves its remuneration package!