Q:Recent AGM seasons have seen an increase in ‘no’ votes against some types of resolutions. What can I do to help prepare my company for our AGM?

A: Investors across Asia are beginning to alter their approach to the AGM season and voting. Whereas in the past, the AGM was a fairly benign event with a guaranteed outcome, it is now prudent to dedicate time throughout the year to shareholder identification and engagement, in order to be as prepared as possible for the AGM.

Knowing the identity of your investors is the first step in any successful investor relations or shareholder engagement programme. However, under the existing nominee system, it is virtually impossible for most issuers to know who their true holders are.

A shareholder identification service helps to overcome this unique challenge by investigating share ownership in a highly efficient and accurate manner. The end result is a comprehensive report detailing the identities of the beneficial owners, their respective investment profiles and other relevant information, delivered in an organised board-level report format.

With this in hand, you are well equipped to embark on the next phase – shareholder engagement. The Corporate Secretaries International Association (CSIA) has just released a position statement on shareholder engagement, alongside an engagement practices paper, which makes a number of recommendations for issuers, some parts of which are outlined below.

  1. Corporate secretaries should keep abreast of the corporate governance and proxy voting policies of their significant investors, understand if and how their company’s corporate governance practices may be inconsistent with those policies, and explain any substantive differences between the two to their significant investors.
  2. Corporate secretaries should keep their boards and senior management informed about corporate governance trends and any concerns investors may have about the company’s corporate governance practices.
  3. Corporate secretaries and designated members of senior management, as appropriate, should engage in regular communication with significant investors and have established channels through which investors can communicate with company management and the board.
  4. Corporate secretaries should also communicate regularly with retail investors, and should, if practical, utilise available technology to enable shareholders to communicate with senior management and the board, and to participate virtually in the annual meeting of shareholders.
  5. Communications (of some form) with investors should be regular and routine. Companies should not wait until a crisis or a serious issue develops before engaging in a dialogue with investors.
  6. Companies should designate and disclose the identity of persons charged with the responsibility of communicating with investors.
  7. Companies should establish a shareholder engagement policy as appropriate and publish it on their website.

Your relationship manager at your registrar will be able to provide you with advice for fulfilling some of these engagement and corporate governance best practices. For the full text of the papers from the CSIA, please visit: http://cpu.vg/CsiaShE.

The Securities and Futures Commission (SFC) is inviting market participants to submit written comments on its Consultation Paper on the Principles of Responsible Ownership; you may submit a response no later than 2 June 2015. The consultation paper is available on the SFC website: www.sfc.hk.


Ying Ci, Managing Director of Shareholder, Identification & Proxy Solicitation Solutions

hkinfo@computershare.com.hk, www.computershare.com