Australian companies have experimented with a new digital voting platform this proxy season, with 561 annual general meetings using Citi’s Proxymity voting platform, offered in partnership with Computershare.
The platform enables companies and investors to interact online and cast their votes in near real-time, cutting the traditional route including issuing agent, sub-custodian, global custodian, ballot provider and voting advisory agent.
The digitized voting system has removed traditional deadlines for submitting votes up to three days ahead of a company meeting, according to a company statement.
Co-founder of the platform Dean Little explains that a saving of three days is based on ‘a simple calculation on a combination of how much faster the ballot notification and notice of a meeting reaches investors via Proxymity than the existing channels, and how much extra time [shareholders] have before needing to submit the vote to reach the issuer before deadline.’
Minimizing mistakes and getting up to speed
Ian Matheson, chief executive officer of the Australasian Investor Relations Association (AIRA) is hopeful that bypassing intermediaries could help to eliminate delays and errors.
‘Shareholder voting is a crucial pillar of the governance process and one where speed and accuracy are paramount,’ he says in the statement. ‘Proxymity has the potential to remove many of the processing pain-points traditionally experienced around AGMs, and will bring greater transparency and efficiency to how companies interact with their institutional holders, and vice versa.’
The system has recorded a vote transmission time of as low as 27.5 seconds for European investors, notes the release. The platform also allows companies to see detail on the beneficial owner of the shares voted rather than just the custodian.
‘Institutional investors often hold shares in hundreds of companies, and they choose to hold their shares via custodian banks, so the share-voting process can be complex and time-consuming. Via Proxymity, we are streamlining the process and removing many of the associated pain-points,’ says Martin Carpenter, head of securities services at Citi Australia, in the statement.
Regulatory changes to accelerate AGM digitization
The Proxymity team aims to take advantage of regulatory changes such as the Shareholder Rights Directive II (SRD II), which places new transparency requirements on intermediaries in the investment chain.
‘We have seen in the Australian market and others, such as SRD II in Europe, that regulation can certainly be a catalyst for change,’ says Little, adding that the company plans to roll out the platform in the EU markets that will be impacted by the SRD II regulations once they are enforced later this year.
The firm piloted the program in Belgium and the Netherlands in November 2019. Earlier in 2019, the company also ran a successful pilot in Spain for the Iberdrola AGM and another IBEX 35 meeting.