Asset manager perspective: Shareholder voting process

20 May 2020

Voting at shareholder meetings is a key component in the well-functioning of financial markets and provides important opportunities for investors to exercise ownership rights and hold company boards accountable. For shareholder voting to have the intended effect, the process needs to be efficient.

Well-functioning markets allow for capital to be allocated efficiently across national borders. The framework for exercising shareholders’ voting rights varies between markets, with significant differences in how shareholder meetings and voting processes are organised. Many markets operate with manual processes, introducing uncertainty as to whether votes have been duly registered and counted. There has been progress by regulators in some markets to address these challenges, but there is little international co-ordination.

We have gathered data from 66 markets to analyse the shareholder voting process and present the key findings in this paper. Our findings confirm the lack of a uniform framework across markets. Few markets have end-to-end electronic voting systems or vote confirmations. On this basis, we consider what should be the main features of an efficient voting process, and the role of key stakeholders - including the issuers, investors, industry participants and regulators - in promoting necessary improvements.

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