Intelligent relations

How bringing digital end-to-end proxy voting benefits shareholder engagement in SA

Understanding ‘a lot of things’ versus understanding ‘what’s important’ can have a material impact on a listed company’s shareholder engagement strategy. After working with issuers for more than 25 years, Computershare finds that the true value lies in having the right management insights and information at the right time, rather than having all the information to decipher in a small window.

Computershare recently collaborated with Citi and Proxymity to introduce digital end‑to‑end investor proxy voting, a first in the SA market, facilitating global connectivity both into and out of the country for international issuers and investors alike.

Computershare has found that investors’ voting behaviours and what they consider corporate governance best practice to be is one important example of the intelligence that can greatly benefit issuers, optimising their governance operating models, the quality of communication between stakeholders, and the shared value that either a company secretary, or investor relations professional creates.

A company’s shareholders have obligations and responsibilities that can affect the strategic direction of a business. They get a chance to have their say at events such as annual general meetings (AGMs), where voting on company resolutions takes place.

The transparency and efficiency of digital end-to-end proxy voting facilitate more intelligent conversations between investor relations teams and their shareholders and investors

Common recurring themes, such as director election or remuneration, ESG and, to some degree, the say on climate proposals, are areas carefully considered during voting season and warrant a strengthened narrative by companies with their shareholders, as shareholder priorities affect AGM voting behaviours. Recent AGM season reviews by Computershare’s Georgeson experts highlight that that most resolutions not supported by the main proxy advisers received high levels of opposition from shareholders or investors. This highlights the importance of issuers proactively engaging with proxy advisers, institutional and retail investors and shareholder activists.

With an effective and proactive engagement strategy, companies develop mutual trust and can gather feedback to deliver long-term shared value and ensure the sustainability of the company. When you add transparency, two-way engagement, efficiency and technology, you get intelligent investor relations. This becomes a powerful tool to amplify engagement, and it opens further opportunities to shape messages to shareholders as well as their perceptions, protecting the company’s reputation and defining its corporate objectives.

SA reached a significant milestone in driving intelligent investor relations when a digital end-to-end investor proxy voting service, Proxymity Vote Connect, went live in August 2023.

Computershare has been closely involved in the market-led initiative since 2018, and has been advocating for its roll-out in SA to benefit the financial market. Proxymity is backed by some of the world’s largest financial institutions, including BNP Paribas, BNY Mellon, Citi, Computershare, Deutsche Bank, Deutsche Börse, HSBC, JP Morgan, Mediant, and State Street.

Proxymity Vote Connect Total was conceived in response to the increasing demand from issuers, intermediaries and investors for heightened transparency and improved engagement. The platform offers a direct connection between all parties, enhancing transparency and efficiency across the board. The solution is a first of its kind for the region facilitating global connectivity both into and out of the country for international issuers and investors alike.

The benefits for all connected parties are substantial. Issuers can now control notifications sent to investors, receive votes earlier and engage with investors more efficiently. Shareholders can take advantage of having more time to research, cast votes right up until market deadline and receive confirmation that their vote was cast at the meeting. The improved platform enables the market to address the shortcomings of traditional, often paper-file or Excel-file based, voting channels both globally and in SA.

The launch of the solution went live a little over a year after Proxymity announced an agreement to connect exclusively to Computershare in SA, ensuring the market benefits from Proxymity’s unique ability to provide ‘golden source’ announcements, real-time voting and vote confirmations throughout the shareholder chain of ownership.

‘The use of data and market intelligence in investor relations can help issuers create effective shareholder engagement strategies that reach as many holders as possible,’ says Computershare South Africa CEO Bennie van der Westhuizen.

‘Proxymity and Computershare’s connectivity service enables investors to begin submitting real-time voting instructions to Computershare more than a week before an AGM takes place, enabling issuers to facilitate more meaningful conversations between their shareholders, investor relations teams and boards, increasing shareholder input and improving governance.’

From an issuer’s perspective, transparency is a major benefit when it comes to understanding and narrowing down who voted in a specific way, helping to avoid a breakdown in the communication process.

Van der Westhuizen explains that the pre-existing challenges from an issuer’s perspective revolve around votes and understanding who voted a specific way, whether it was for or against a resolution. Understanding this will lead to more intelligent investor relations.

‘It is about the efficiency of the communication from the issuer straight down to the underlying investor and back again in terms of what they are saying. You can have a solution that does the first part, where it is the investor to the issuer, but the issuer does not know who voted and still cannot see beyond the nominee structure in a lot of instances,’ he says.

‘It is that transparency and efficiency of the voting that comes with Proxymity that enables more intelligent conversations with the investor relations teams and their shareholders and investors. And with this solution, it is the first time you get it going in our registry system where the issuer can get a live update on the votes, without any manual intervention whatsoever.’

This proven technology has already been adopted in several markets. In the UK, more than 65% of FTSE 100 firms are connected to Proxymity and are benefiting from improved connections with their investors – as the system helps companies adopt global best stewardship practices, including compliance standards – and direct connections to global libraries and institutional shareholder services, fostering trust and confidence within the investment community.

‘Investors and issuers alike will benefit from our tested and trusted technology, which will provide unrivalled transparency while stimulating investment in the country. Launching Proxymity Vote Connect Total in this market is a significant step in our mission to reinvent investor communications globally,’ says Dean Little, co-founder and CEO of Proxymity.

According to Masha Maharaj, Citi Securities services head in sub-Saharan Africa, ‘the extension of Proxymity into South Africa is an example of Citi’s continued efforts to leverage innovation to improve client experience. The collaboration with Proxymity and Computershare enables our SA clients to benefit from a more streamlined and transparent digital investor experience’.

Should you require more information, contact Proxymity or a client engagement manager at Computershare.

+27 (0)11 370 5000
[email protected]