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e-Voting: How has proxy voting changed?

IN A NUTSHELL: In the past, shareholders submitted their proxy votes by fax or mail. Today, voting at annual general meetings (AGMs) is a simple click on your phone or laptop. This is thanks to an innovative e-Voting system that allows individuals worldwide to vote on matters concerning South African companies.

The pre-digital way of administrating proxy votes involved a complex system of intermediaries who manually collected a company’s printed AGM agenda and proposals. These materials were then physically delivered to the investor or retirement fund, via a courier service.

Any delays that occurred in the data-capturing process were compounded due to logistics, administration errors and the misinterpretation of votes. The system was dealt a further blow if investors were invested in multiple companies, across national and international borders. Both parties had to process enormous volumes of paperwork to fulfil their fiduciary duties.

Captains of industry

As South Africa emerged into a democracy in 1994, it became apparent that we needed to implement an electronic voting platform for shareholders in companies listed on the Johannesburg Stock Exchange to attract foreign investment and grow our economy.

International investors required real-time reporting, and fast and accurate analytics to ensure their capital was invested safely. Corporate governance became a critical issue, with investors wishing to exercise their vote on material matters  ̶  those issues that could substantially affect a company’s ability to create value in the short, medium and long term.

A digital-first solution

Strate was established in the 1990s to digitise the paper-heavy share-certificate system into an agile, high-speed data-driven, digital platform. Using artificial intelligence (AI), blockchain, cloud and digital infrastructure, Strate created a proxy e-voting platform. The platform connects investors to South African equities and bonds through a simple 3-step authentication process.

Using any device, a vote can be cast, a proposal made or feedback given on a cloud-based platform before and during the AGM, providing voting summaries, reports and targeted information for investors, with more transparency, monitoring and evaluation.

From the comfort of a conference venue in Durban to a taxi rank in Polokwane, investors now have real-time access and voting right up until the resolution of a meeting has opened, through online participation. Data can now reach the investor and company on time, building confidence in the market and providing protection to the asset owners.

What is a resolution of meeting?

These resolutions serve as an official record of the decisions and actions taken by the board of directors and shareholders during an AGM. They provide transparency regarding key matters discussed, voted upon and approved by the stakeholders.

Dawn of a new era

The technical engineering and mastery of Strate’s system are one of the many assets to South African capital markets. Its contribution to the metamorphosis of proxy voting from analog to digital is a testament to South Africans’ inherent characteristic of being resourceful and finding solutions.