Sodali’s institutional Investor survey on ownership disclosure indicates “conservative support” for a program that would give companies access to systemically-generated information from intermediaries in the voting chain.
Survey: Ownership Disclosure by Institutional Investors
Finance Monthly: Sodali announces results of institutional investor survey on ownership disclosure
In May 2011, the French Regulator AMF (Autorité des Marchés Financiers) has set up in May 2011 a working group on general meetings, chaired by Olivier Poupart-Lafarge. It has recently published a report with its conclusions and launched a public consultation. Sodali’s answered with a comment letter (attached). The working group has focused on three major topics, dialogue between shareholders and issuers at general meetings, functioning of general meetings, and voting on regulated agreements.
Ahead of the 2012 French proxy season, Sodali gives you its sentiment of the challenges which both issuers and investors are bound to face. The document highlights the increasing relevance of the dialogue between companies and investors on governance topics, identifies best practices and forecasts the longstanding impact on the governance landscape of the adoption of such practices.
Institutional investors face increasing pressure from issuers and regulators to be more transparent about their stock ownership and share voting. Sodali has had informal discussions with a number of institutional investors about these issues in the context of annual meetings and cross-border voting. Many of you have indicated your support for greater transparency in the proxy process as a means to facilitate end-to-end vote confirmation – a goal long sought by shareholders. Transparency would also facilitate the creation of an audit trail needed for verification of voting results. There seems to be general agreement among both companies and investors that a voluntary approach would be preferable to regulation, provided that it would not increase costs, require additional time and resources, or conflict with internal policies or contractual commitments.
The questionnaire that follows seeks your views on a proposed voluntary program that would give issuers access to the systemically-generated ownership data that is currently used by agents and intermediaries to distribute disclosure documents, solicit voting instructions and tabulate votes. Many important details, such as the definition of “beneficial ownership” and the use of nominee accounts, cannot be addressed in a survey and would have to be carefully worked out if steps were taken to implement the proposed program.
The goal of this survey is to determine whether the concept of sharing systemically-generated ownership information with issuers makes sense to you.
A summary of survey results will be published on the Sodali website.
Sodali joined with J-Eurus IR Company, Ltd., Tokyo, in a letter to Japan’s Ministry of Justice commenting on proposed revisions to the Companies Act. The letter supports the requirement for companies to appoint an independent director, but expresses concern that proposed reforms fall far short of international corporate governance standards. We urge a redefinition of the board’s role at Japanese companies and adoption of core governance principles that are the basis for governance best practice standards around the world. We are concerned that the flight of global investment capital from Japanese companies will continue as long as corporate governance standards in Japan falls short of global best practice.
During the summer of 2011 Sodali was retained by the Council of Institutional Investors (CII) to work on a two-part project relating to international proxy voting: (1) a survey of CII members about current cross-border voting practices, concerns and obstacles; and (2)preparation of a practical guide, or primer, to educate CII members about the mechanics of cross-border voting, how to use the process more efficiently andhow to overcome obstacles and improve results. The final report, published in November 2011,focuses on eight countries in three regions: France, Greece, Sweden and Switzerland in Europe; Japan and South Korea in Asia; Brazil and Mexico in Latin America. The report also recommends steps that the CII and its members can take to work together to improve the cross-border voting process.
For the fourth year in a row, we are proud to send to you Sodali’s annual Client Memo, discussing trends in corporate governance and the outlook for the upcoming 2012 annual meeting season. We predict an increase in activism at targeted companies and suggest preparations to deal with both short and long-term governance challenges.
The Memo is the result of our active involvement and engagement with companies, institutional investors, regulators and other relevant market participants and has quickly become a reference in our industry.
Should you be interested in developing these thoughts further, please do not hesitate to contact us at info@sodali.com
Rivista RI, Portuguese version (pdf)
The 2011 Client Memo published in the Wall Street Lawyer (pdf)
The article, co-authored by Veronica Vari, provides a useful suimmary of the main features of the proxy system and the exercise of shareholder rights at General Meeting in the United States.
John Wilcox and Andrea Di Segni expand on the impact on Brazilian Meetings of the newlly issued CVM Instructions 480 and 481. Practical recommendations to issuers are provided to deal effectively with their shareholders.
