Investor rights will do nicely

Has anyone out there got any idea what the Minister for Public Enterprise, Ms Mary O'Rourke, can be thinking when she talks about reviewing the rights of small shareholders in the aftermath of the Eircom annual general meeting?

What's to review? Shareholder rights are very simple . . . your rights are as strong as the holding you have in a company or the block of holdings you can unite in one cause.

Okay, so there can be different voting strengths and privileges attached to different classes of shares, but that reflects the investment in the company at the outset by the shareholder. It's democracy. Just because we don't like the outcome doesn't mean there is any good reason for changing the rules.

Imagine for a moment what would happen if the rights of small shareholders were adjusted to give them a greater say in company affairs. Think of the chaos. Companies could be paralysed by every crusader with a cause and the institutional investors would be scared away.

Put simply, there are not enough small shareholders out there to support the number of companies looking for investment.

Without the institutions, such companies would be starved of capital investment; similarly, without the investment opportunities provided by companies listed on the stock exchange, where would our pension and other savings be invested?

Eircom's a.g.m. was one of the great pieces of corporate theatre, but exceptions make poor rules. Changing the balance of shareholder rights would put the Eircom remuneration package in the ha'penny place in the league of folly.