Member Nominated Trustees and Corporate Governance

Abstract

A central issue in corporate governance is who elects the directors of FTSE100 or other large companies? Who gets the votes in our economy? This matters because, if unaccountable and in charge of 'other people's money', directors and institutional shareholders can be prone, as Adam Smith once wrote, to 'negligence and profusion': tending to make mistakes and unjustly enrich themselves at others' expense. This paper contends that member nominated trustees may play a crucial role in giving voice to people saving for retirement, who provide the largest source of corporate equity. First, it gives a brief history of where member nominated trustees came from. Second, it summarises how corporate governance works in the UK, and the place of trustees in it. Third, given the rapid economic and financial developments today, it points to a role that member nominated trustees might play in the future.