As previously reported, the SEC is proposing that US proxy voting results should be published within 4 days rather than waiting for the next quarterly return to be lodged, which is the majority practice at the moment.

In many parts of the world we now take it for granted that we can see scrutineered voting results within HOURS of the close of even the most contentious meetings (notable exceptions being certain European markets where the minutes take some weeks or even months to appear, and Ryanair - who refuse disclosure entirely despite a Combined Code recommendation). Moreover, the disclosure format has become increasingly standardised to also show votes withheld/abstained which form an important part of the institutional investors voting strategies.

Despite the increasing use of technology in Europe and Australia/NZ to improve the transparency of the shareholder process, it seems the SEC has doubts that the tabulation can be completed within the 4 days in question. Indeed some commentators are suggesting a 'carve out' for contentious director elections.

While Lord Myners may think that the British vote plumbing is in need of an upgrade, not a day goes by that, as a proxy voting agency, we are not immensely grateful for what the Victorians did for proxy voting. Kudos goes to the British registrar community for the smooth running of a system which allows:

• Tight economic and democratic linkage: 48 record dates;
• Electronic vote lodgement: No anti-competitive ties to proprietary platforms;
• Control of Overvoting: accurate share registers go hand in hand with accurate voting;
• Transparency of and access to share registers: Pooled nominees are largely a US invention imposed unwillingly on UK investors; and
• Speedy vote tabulation and disclosure: When you have to do it you find a way to do it.

Congratulations must go to the SEC and those investors that have lobbied so diligently over the years for reform of US proxy voting processes. But as with the European reforms, it is essential that the SEC does not cave in to vested interests who find these reforms too challenging for their business models.

Links

Harvard Law Blog >>

SEC Proposal >> (page 44)