Scrutator: Unfair share of the blame

IT IS the new corporate catch- phrase. 'Don't blame us, blame the shareholders.'

Take four examples. Asked why Invesco MIM is not helping Maxwell pensioners, whose funds it partly managed, Lord Stevens, the company chairman, says: 'My moral obligation is to shareholders.'

In Cumbria, Noel Davies, chief executive of VSEL, the submarine- builder, emphasises the need 'to retain the support of shareholders' as he cuts thousands of jobs.

A customer of Thames Water writes to complain about a pounds 50,000 donation to the Conservative Party. Back comes the reported reply: 'The board was satisfied that the company and its shareholders would benefit from the return of a Conservative government.'

Lord Hanson dashes the hopes of many, revealing he will not be rescuing Canary Wharf after all. Such a move, says a company spokesman, is not deemed in 'the best interests of shareholders'.

Directors will always try to extract the maximum return for their investors. But it appears shareholders are now being used as a moral brickbat, to explain away actions that others may find disappointing or offensive. Even worse, in other instances it appears that they are being used to cover up for the negligence of management.

It is a public relations adviser's dream. You can almost hear him whispering in the harassed executive's ear: 'Don't admit anything, say it was the shareholders.'

Companies which adopt this approach cannot have their cake and eat it. If they are going to murmur 'shareholders' interests' whenever they run the risk of being criticised, they should start taking them more seriously. It is time for the smaller stockholders to be given boardroom representation. It is also time for shareholders to be consulted before a controversial course is adopted.

Directors may not like it and they may moan it is impracticable. But if they are going to wash their own hands while dirtying those of their shareholders, there is no alternative.

Shareholders, too, need to stand up and be counted. Traditionally, the big institutions confine their statements to a 'no comment' or the barest, meaningless, phrase. This is no longer good enough. Their silence can only be interpreted as tacit approval.

So: no Invesco MIM shareholder wants to repay the Maxwell pensioners; VSEL investors do accept there is no alternative to the axing of thousands of jobs; Thames Water stockholders vote Conservative and Hanson investors do not see anything to be gained from owning Canary Wharf.

These are all issues of national importance and their views, rather like the block voting system at the Trades Union Congress, are being delivered en masse.

Even when they exercise the ultimate sanction and sell their shares it is usually done discreetly and long after the event. It would be better for everyone if their views were aired at the time - if they said: 'Hang on a minute. We like the company, don't get us wrong, but actually, we don't agree with what it's just done.'

Now, that would wipe the smile off the PR face.