Edition: Mar - May 2014
Start of the revolution
Pioneering project by Ince shows that the apathy of smaller investors can be headed for history. The tools for electronic interaction with companies have become operative.
Farewell to the laborius process of JSE-listed companies relying on print for shareholder communication; to depending on the vagaries of the SA Post Office, and to preparing financial notices for production in newspapers. Farewell also, it can be anticipated, to poor attendance at shareholder meetings and to the lethargic execution of proxy voting.
Hullo to the new era of technology that enables instant contact with a broad mass of shareholders and to their interaction with the boards of JSE-listed companies. Hullo also, it might be hoped, to lower costs.
This is no pie-in-the-sky, as pilot projects have already proven. Ince, which for years has held a lion’s share of the industry that prints annual reports for postal distribution and compiles the financial notices for print publication, has taken the great leap forward. It has introduced a digital platform for electronic communication with shareholders.
At its heart is ‘iRegister’ which contains the electronic contact records of 2,4m investors. The ‘iCollaborate’ and ‘iEdit’ tools enable a digital and print document to be created simultaneously. The digital document can be delivered via e-mail to computers and mobile phones. Shareholders can vote their proxies electronically via ‘iProxy’. They can also attend shareholder meetings live on their desktops or mobiles devices (see diagram).
“Since launching the platform,” says Ince joint managing director Alban Atkinson, “those listed companies to have tested the technology found that smaller invesors indeed wanted to participate when given the opportunity.” He mentions examples:
As part of the electronic communication was a prerecorded video presentation of the results. Were “small investors” apathetic and disinterested? Well, 771 had read the electronic communication. Analytics also showed that the average viewing time on the site, inclusive of the 17-minute video, was 21.40 minutes.
The problem was so bad that it could not even get together a quorum, in terms of its memorandum of incorporation, to hold the meeting. But when electronic communication was used, 400 shareholders attended.
This followed a negligible response to the proxy forms inserted in the printed annual report that the SA Post Office had presumably delivered. Similarly, attendance at the agm was poor. Then the motions were sent to shareholders on their mobile phones to vote by proxy.
Over 5 000 “small investors” voted on the resolutions. Not only this, but many of these investors also registered to attend the agm from their desktops or mobile devices. The meeting went on for six hours.
Welcome to the new world of meaningful shareholder communication.