Ask the expert November 2012
Q: How can proxy solicitation help support corporate actions?
A: The current ‘shareholder spring’ has caused issuers to sharpen their focus on the AGM/ EGM and ensure they have information on how their shareholders will vote and why. A proxy solicitor can provide companies with the valuable insight needed to successfully pass resolutions and offer insight into the outcome of a vote, prior to the votes arriving.
In Hong Kong, CCASS (Central Clearing and Settlement System) holds most of the shares and provides one anonymous vote on behalf of all the banks and brokers who submitted instructions to them. This vote can come in at the last minute leaving little time for remedial action if voting against a resolution. Having insight into the direction this vote might take in advance can give issuers time to alter their resolutions or communications if needed.
Proxy solicitors can analyse various aspects of the shareholder base, to provide insight into the expected outcomes of shareholder meetings based on their experience in engaging wth shareholders globally, throughout the year. Although voted files do not contain the names of the beneficial investors who voted, a proxy solicitor can analyse the issuer’s register and determine the expected vote outcome based on the makeup of voters and how shareholders have voted at other meetings. A proxy solicitor can also provide detailed insight into the corporate governance and voting practices of institutional investors and conduct a market review on key issues that draw opposition.
There is often an unknown level of dependency on a proxy advisor’s voting recommendations by institutional investors. A proxy solicitor can assess the level of dependency on different proxy advisors along with the associated risk, and facilitate engagement with investors and advisors accordingly.
Issuers can feel more confident going into an AGM/ EGM that their resolutions have the best chance of being passed when utilising a proxy solicitor. Working with a proxy solicitor you can be best prepared for your next AGM/ EGM.
Ying-ci, Computershare Managing Director
Computershare Hong Kong Investor Services Ltd firstname.lastname@example.orgC www.computershare.com
Cas Sydorowitz, CEO
Corporate Advisory Georgeson, UK email@example.com www.georgeson.com