Shareholder Activism in the Digital Age
Published - 30 May, 2019
Technology has become so pervasive in our daily lives. It’s now possible to get a degree qualification, sign petitions and even buy groceries online. It’s only reasonable that one should also be able to virtually attend meetings, and where necessary, participate in voting processes remotely.
Shareholder activism is a phenomenon that is restructuring the relationship that shareholders have with corporations. It’s characterised by shareholders using their equity stake in a company as leverage to put pressure on management to take certain policy decisions. To expect shareholders in various jurisdictions to travel to a central point to be able to ask questions and engage with the company’s board chair and directors on a public platform is illogical in an age where digital communication is nearly global.
The chief executive of U.S-based Bed Bath & Beyond, Steven Temares recently resigned from his position, after facing increasing pressure from an activist shareholder group who were calling for his resignation and seeking to oust the retailer’s entire board. The group argued the retailer needs to recruit a new CEO, reverse its weak sales by streamlining the number of products it offers and improving its inventory among other issues, all aimed at turning around the company’s profitability.
In this modern age it’s a complete mystery why companies don’t provide all shareholders electronic or telephonic access to their annual general meetings (AGM), if not for voting then for the chance to engage the board.
A small company, Orion Minerals, for example, has offered its shareholders to dial in to proceedings at its AGM in Perth in June, according to a Financial Times journalist. Those shareholders will not be able to vote; however, they will be able to participate in a meeting that previously would be handled by a proxy.
In South Africa, MTN Zakhele Futhi, the multinational telecommunication company’s BEE shareholder structure was scheduled to hold an AGM as per regulation. With most shareholders not being able to physically attend in person due to various constraints, the company opted for a virtual voting system to reach quorum for the passing of resolutions. The shareholders were able to participate in determining the outcomes at the AGM and the client was able to reach consensus on various resolutions.
Granted, some AGMs can be bland, box-ticking affairs and concluded within 10 minutes, attended by the smallest number of investors. But others are far more contentious, with the board challenged on executive remuneration, a source of growing unhappiness among investors, share issues along with environmental and community concerns.
These meetings can drag on for hours, as recently witnessed with Anglo American’s AGM in London that the company’s South African investor base could only access through Twitter and Facebook commentaries from activists grilling the resources company.
For the sake of corporate transparency and accessibility companies must give as wide a range of shareholders as is possible the opportunity to participate in these annual meetings.
Enter iProxy and iMeeting offerings from Ince. iMeeting is an interactive, virtual platform that facilitates shareholder attendance at a live Annual General Meeting. Attendees can simply logon, view a streaming webcast, have a live interactive forum with the speaker and subsequently vote on resolutions. The iMeeting solution has benefits for both board and shareholder alike. Due to the virtual, easily accessible nature of the iMeeting platform, attendance levels are to increase. The solution also enables the board to have a greater sense for shareholder sentiment.
Votes placed within an iMeeting session are sent together with those lodged through the iProxy solution to those tallying votes for an efficient, seamless voting process.
iProxy is an online proxy voting solution for the digital age. With shareholders being able to vote on resolutions in absentia, iProxy takes the process of submitting of proxy voting forms into the digital space. iProxy mirrors the paper-based proxy voting system and can be used in conjunction with, but not replace, paper-based voting. The benefits of using iProxy’s online voting solutions means attaining a higher rate of responses and making it easier to reach the required quorum for any legal meetings. Results of iProxy voting are securely sent to those tallying up the votes at the live annual general meeting so that results on the various resolutions can be announced.