Ask the Expert February 2015 #2
Q: We are considering introducing an online proxy voting channel – what are the legal and corporate governance aspects we should consider?
A: The Hong Kong Companies Ordinance which became effective in March 2014 has introduced a number of changes for companies incorporated in Hong Kong, including one which enables electronic delivery of shareholder services, as detailed in Section 599 ‘Sending documents relating to proxies in electronic form’:
If a company has given an electronic address in –
- An instrument of proxy issued by the company inrelation to a general meeting; or
- An invitation to appoint a proxy issued by the company in relation to the meeting;it is to be regarded as having agreed that any document or information relating to proxies for that meeting may be sent by electronic means to that address (subject to any conditions or limitations specified in the instrument or invitation).
This includes proxies appointed for a general meeting and the documents needed to either appoint or terminate such an appointment.
As the listing rules do not prescribe the method by which shareholders must return the proxy form/instrument (or other documents or information relating to proxies) to a company, this can therefore be decided by the issuers and shareholders themselves.
As many Hong Kong listed companies are incorporated in various jurisdictions such as the Cayman and British Virgin Islands, Bermuda and the PRC, issuers should check the specific rules relating the handling of proxy forms for their jurisdiction.
However, if the option is available to issuers, with the increasing adoption of the internet across the world, offering an electronic proxy (eproxy) channel as well as a traditional paper route is highly recommended.
Four Computershare Hong Kong clients (who are listed in the UK) already provide an online eproxy service to their shareholders, allowing them to nominate or terminate a proxy eletronically. This includes HSBC and Standard Chartered Bank – and communications can of course be multilingual. More than 90% of Computershare’s UK-listed clients already offer eproxy services to their shareholders.
For companies looking to empower their shareholders to vote without having to attend the AGM in person, eproxy is an ideal solution. In addition, it is environmentally friendly, quick and can be done at a time to suit shareholders – and means that votes can be cast effectively even if an event like Occupy Central makes it more difficult for shareholders to physically attend AGMs.
Stephanie Cheung, Vice-President of Client Services, Computershare Hong Kong Investor Services Ltd, email@example.com, www.computershare.com