In a report commissioned by the Australian Council of Superannuation Investors, Ownership Matters comprehensively reviewed the voting system in Australia in 2012.
The voting experience of 23 major institutional investors in all 1,895 voting resolutions at S&P/ASX300 company meetings in 2011 was comprehensively examined. The results declared by the companies were compiled, then Ownership Matters worked back through the complex chain of intermediaries involved in the system to identify and explain any anomalies.
A total of 9 anomalies in 7 companies were uncovered, in which a significant disparity could be fully established from the sample data and subsequent validations. These instances are documented as case studies in the research report, with attributions as to the points where errors occurred.
Significantly, the research also notes:
- the likelihood that many further anomalies will have occurred, based on reasonable assumptions about the likely voting activities of institutional investors outside the specific survey sample;
- a number of operational weaknesses in the systems used to cast institutional shareholders’ votes; and
- widespread issues with administration of voting exclusions for investors who have participated in share placements.
The report concludes with a series of recommended changes to existing market practices and potential regulatory reforms to improve Australia’s proxy voting system.
These recommendations include a separation of the cut-off dates for voting entitlements and vote lodgement, the ability for shareholders to appoint independent scrutineers to review tight results, and requirements for all listed company resolutions to be resolved by poll and not a show of hands.
The report can be downloaded here on ACSI’s website.