goes to Australian-listed Qbe Insurance Group Ltd at 32 days. But before company secretary Duncan Ramsay throws himself onto his letter opener, it’s not his fault. Yes we are back to the wretched “chain of intermediaries” again. As one of our senior developers muttered into his coffee this morning: “This just seems a ridiculous situation in the 2nd decade of the 21st century. You can transfer large sums of money around the world in seconds, yet it can take 21 days to get a vote intention from its source to its destination!”
December 2010 will mark Manifest’s 15 years in business. We started something a bit radical – we proposed that votes could be submitted electronically to meetings and that the deadlines for investors could be as close as 2 days before the vote cut-off so that more informed voting decisions could be made. Fast forward to 2010 and the proxy re-distributor of choice for custodians has finally caught up with us. Imitation is the sincerest form of flattery – isn’t it a good job that there is competition so that the 900lb gorillas have to keep up to speed?
Qbe isn’t the only company affected by unrealistic deadlines, there is a swathe of European companies whose deadlines have been set at 21 days – i.e. the same day they are supposed to issue their meeting notices under the shareholder rights directive. As we write, there are over 1,100 meetings with deadlines longer than 10 days in our work queue – that is just not acceptable.
If custodian banks want to outsource proxy redistribution (we won’t dignify that job with the term voting agency, agents know to put their customers’ needs first) to a 3rd party that’s their choice – but it’s not necessarily their customers’ choice. Voting rights are legally no different to buying and selling rights. In that regard fund managers are obliged to seek best execution on behalf of their clients. If best execution of voting rights is 32 days then we really have to question how much investors really care about ownership.
It’s time to let the people who know what they are doing get into the driving seat so that investors can get on with their job. As we’ve shown, it can be done.
The final word goes to our research manager, Alan Brett, who in his spare time runs the technology for his local orienteering club – so he knows a thing or two about map reading against the clock. As he curtly pointed out, “we could probably walk to those meetings faster”.
Happy proxy season everyone.