November 2009 IRGR
Monthly Newsletter – January 2009 – Issue 6
1
It is needless to say that hundreds of thousands of company meetings take place globally
every year, in which shareholders are requested to vote on the most varied issues. It is also
needless to say that the hassles of such events, such as the manual collection and processing
of significant volumes of votes (which can at many times can result in human errors), as well as
the mandatory physical presence requested in many countries for shareholders or representatives
can sometimes make the corporate voting process somewhat of a burden and discourage
minority voting. Not to mention all of the costs involved.
According to the Society of Corporate Secretaries & Governance Professionals, the voting
system has generally been a routine event in the past with company proposals receiving a high
percentage of votes (often as much as 90%) without the need of special solicitation efforts,
and minority stockholder proposals typically received less than 10% of positive votes, most
of which have been done through proxy voting. The proxy voting process has tolerated
this since there were very few contested votes. Recently, the Shareholders Communications
Coalition launched a website to increase general public awareness on the system by which
investors vote their shares in corporate events as many individual investors are unaware of
what rights they have when owning equity securities. The effort is aimed at drawing attention
to the rules and regulations adopted years ago by the U.S. Securities Exchange Commission
(SEC) regarding proxy voting and shareholder communications which need reform.
As shareholder activism increases over the years, the voting process is gaining significant
importance where all votes must fairly represent the long-term interests of all stockholders and
minority shareholders are also increasingly recognizing that voting is not only a responsibility
but a powerful tool that can be used to make their opinions count. Thus, ways to make the
voting process easier and better are rapidly evolving.
The electronic proxy voting, where shareholders can vote on corporate issues remotely from
computer terminals and votes are received directly by the company without being transferred
by an appointed proxy, is one of these ways and has been gaining rapid global popularity over
the past years, becoming a global standard of best practices for good corporate governance and
proactive investor relationship development.
In addition to the benefit of providing timely
voting outcomes, the increasing costs savings
on printed communication is considered
to be in the best interest of shareholders,
who also benefit from voting at a distance
without being physically present at the
meetings or bearing with the costs of
appointing a representative.
Anticipating what will be a reality
in proxy voting in the near future, MZ
Consult, a leading investor relations,
technology, financial services and integrated
communications consulting firm, which is
also responsible for IR Global Rankings,
Electronic Proxy Voting is a Reality
The IRGR Monthly Bulletin is
an MZ publication. All rights
reserved; partial or entire
reproduction without express
MZ authorization is strictly
prohibited. The articles herein
deal with matters of general
public interest and are not
intended to offer legal opinions
or to induce investment
decisions.
Content: IR Global
RankingsTeam
(irgr@mz-ir.com)
November 2009 IRGR
2
The new platform also brings other innovations, including the possibility of real-time audio
or video webcasts of the meetings, allowing shareholders to accompany the discussions and
decisions as they happen. In addition, companies will be able to implement blogs or forums through
which shareholders can exchange opinions and discuss the proposals prior to the meeting.
recently inaugurated an innovative and unique project called Online General Meetings, which allows for the
rendering of digital voting by shareholders and stakeholders through a safe and efficient method. Although
the main purpose of Online General Meetings is to provide for the valid submission of digital votes at investor
meetings at companies and funds that subscribe to the service, the overall goal of the project is much broader in
scope and is in tune with corporate governance best practices. Online General Meetings will not only enhance the
number of investors that will be able to effectively participate in the decision-making process of the companies
and funds in which they invest, but it will also create virtual spaces for debates and discussions amongst all of the
parties involved and, thus, promote unprecedented proximity, transparency, and cohesion.
Online General Meetings has been considered a ground-breaking investor voting project in Brazil and
aims at reaching other markets worldwide. The project includes the assistance of the global law firm of
Thompson & Knight LLP, through its Brazilian affiliate Tauil & Chequer Advogados, with digital voting
certification is issued by CertiSign and is approved by the Comissão de Valores Mobiliários (the Brazilian
Securities and Exchange Commission). CertiSign is the exclusive Brazilian provider of products and services
provided by the American company VeriSign Inc. and the only Brazilian affiliate of the VeriSign Trust
Network. Digital certification replaces the notarization and consular ratification of powers of attorney,
which is a legal requirement in certain countries.
Online General Meetings represents an important step in improving and strengthening the capital
markets by allowing shareholders -- especially minority shareholders -- to play a greater role in company
decisions (AGMs/EGMs) at no cost. "One of the many advantages of this service is that we can generate
a complete and up-to-date database of shareholders, facilitating companies' access to them and helping
build a closer relationship," said Vera Abdo, Financial Services Officer at MZ and responsible for the
development of Online General Meetings. "Companies seeking to increase market capitalization and
maintain it at high levels through excellence in corporate governance and minority shareholder best
practices should enable shareholders to effectively participate in corporate decisions," said Abdo. The
new platform will generate even higher levels of transparency, facilitate access to information and ensure
equitable treatment for investors.
Although leading capital market environments already have active corporate governance entities
which analyze and discuss ways to improve voting processes, it can still be difficult to persuade all market
participants that voting, especially minority voting, really matters. For many investors, it is an extremely
important process as it is their best opportunity to engage and exercising their commitment with a
corporation. We strongly believe that everyone in the capital markets environment should be willing to take
the necessary steps to make the voting process more efficient and cost-effective and, although a universal
standard will certainly take time to evolve, the long-term ambition is that online proxy voting will become
an unarguable global reality.
For more information on this topic or on Online General Meetings, please contact the IRGR team at irgr@mz-ir.com.