Turkey's e-GEM Beats Broadridge at Shareowner Communication

Turkey became the first country to require issuers to offer electronic proxy voting with the 1 October inauguration of a voting platform from MKK called e-GEM. The system will stream annual general meetings (AGMs) real time and let shareowners communicate with each other, vote before the meeting, and even change their vote as an annual meeting occurs. Other markets have e-voting but do not require it of all listed companies. Expect other markets to keep an eye on this development.  (Corporate Governance Roundup: New Rules in Canada, Switzerland, U.K., and U.S.; Proxy Voting Innovation in Turkey, CFA Institute) (Istanbul Stock Exchange Moves First on Mandatory Electronic Voting, Harvard Law School Forum on Corporate Governance, 11/6/2012)

I like the fact that their system allows partial and split voting, whereas in the US one often has to actually attend the meeting to split votes. One of the more exciting elements of e-GEM is the ability of shareowners to communicate with each other. However, it appears such communications may only be during the 21 day period in advance of and during the AGM. Here is an October 8th article from FT in pdf (download e-GEM-FT).  Slightly more helpful is this PowerPoint-like presentation.  I’d love to get a report from anyone who has first-hand experience with the system.

Broadridge facilitates virtual meetings and hosts a shareowner’s forum here in the U.S.  While most of us like hybrid meetings, which allow shareowners to join annual meetings virtually, we oppose virtual-only or lockout meetings. See Virtual Lockout at Corporate Meetings: Occupy Some Other Space. While Broadridge facilitates both hybrid and lockout meetings, e-GEM facilitates only hybrid meetings. Broadridge could learn something from the Turks.

Broadridge used to have a shareowner’s forum that allowed validated shareowners to communicate with each other. Unfortunately, Broadridge and the companies discussed in the forum did little to monitor and facilitate the conversations, so the forum degraded into the usual focus on pumping and dumping one sees on other forums that focus on day trading. It was rare to find any meaningful or intelligent conversation.

Broadridge revamped their Shareholder Forum (unrelated to the much longer running Shareholder Forum founded and chaired by Gary Lutin) but it no longer lets shareowners communicate with each other. Instead, issuers can post messages to shareowners and shareowners can submit questions to their companies prior to the annual meeting.

As I checked on November 7th there were only three companies listed on the forum. Broadridge, Microsoft and Intel. I logged on as a Broadridge owner and saw they had a survey on what shareowners liked about the company and on future directions. Users could see at least some evidence of how 39 other participants answered. (I’d guess most of the participants on the Broadridge company site work for Broadridge.)

While these tools are somewhat useful, they are a far cry from encouraging real meaningful input into corporate governance, which at a minimum requires the ability of shareowners to communicate with each other. Let’s hope the e-GEM forums in Turkey fare better.

Aside from Broadridge’s Shareholder Forum, those of us in the U.S.  several other shareowner forums including StockTwitsSeekingAlpha, The Motley Fool, STOCKR and others but most are primarily focused stock-picking and market-timing. Although stock-picking is an important element of equity investing, too many participants are engaged in hype… hoping to pump and dump stocks to obtain short-term gains. With the United States Proxy Exchange centralized activities now suspended for a year or two, we will will need to wait for Sharegate.com for a much more robust system with tools that actually facilitate the ability of shareholders to act like shareowners.


, , , , , , , , , , , , ,

Comments are closed.

Powered by WordPress. Designed by WooThemes