Tomorrow's Investor:

Changing the way we think about share ownership

About the Project

Today, roughly two-thirds of the UK population own shares. We own shares not only in our own names, but also through our investments in pension companies and investment funds, a capital stake amounting to more than £500 billion in UK markets alone.

This democratisation of share ownership has changed the way public companies are owned. As recently as the 1970s, corporations were controlled by handfuls of wealthy individuals. Now, taken together, ordinary investors own large stakes in many of the biggest companies in the world.

Yet despite high profile scandals, increased criticism of the behaviour of some hedge funds, and widespread public dissatisfaction with boardroom pay raises, we largely remain passive and uninformed owners.

The RSA has developed a new project to examine the questions thrown up by this issue: Tomorrow’s Investor. Does shareholder activism matter? Is there a gap between the decisions that are taken on our behalf and the decisions that we would take if we were really engaged in this process? Do shareholders care what is done with their indirect investments? Do they want to or have the tools to get involved?

Why Tomorrow's Investor?

The RSA’s founding charter included a commitment to commerce that continues to this day. In 1993 we brought together 25 of the UK's top businesses to pursue an inquiry into 'the role of business in a changing world'. The report, released in 1995, led to the foundation of Tomorrow's Company, a research and agenda-setting organisation charity which continues to operate successfully to this day.

Today, our focus on civic innovation inspires an engagement with issues of citizen involvement. We believe that we can only attain progress when we come together to talk and act. This is nowhere more true than in the incredibly complex world of global finance.

If you have any queries, or if you would like to participate in any part of the Tomorrow’s Investor project, please contact Rowland Manthorpe: rowland.manthorpe@rsa.org.uk.

Investor Survey Results

The Tomorrow's Investor survey was completed by 225 fellows. The results indicate a contradictory attitude to the rights and responsibilities of indirect shareholding.

Some headline figures
As expected, the vast majority of the respondents - over 70% - owned shares by some indirect means, mostly through private pensions or managed investment funds.

Thirty three per cent of respondents - a slim majority - did not know where any of their indirect shareholdings were invested. Most people had never had any contact with their fund manager, or with the trustees of their pension fund.

Sixty six per cent of respondents felt that they did not want to be more involved in the financial management of their indirect shareholdings; 49% felt they did not want to be more involved in ethical management. However, the vast majority of respondents felt that public companies would benefit from greater investor involvement. Fifty nine per cent felt that ethical management needed investor input; 47% felt that this was the case with financial affairs.

Citizens' Jury

The second stage of Tomorrow’s Investor is a citizens’ jury, a two-day series of seminars and discussions. Attendees – some of whom will be selected from the Fellowship – will be presented with information and opinions by a panel of expert witnesses. They will then be able to deliver their verdict on the implications of activist shareholding.

Useful links and reading