Citing statistics that retail voting declined from 20 per cent four
years ago to less than five per cent in 2010, Daly said, “Reduced
participation in key governance issues is coming at a time when the need
for two-way communication with shareholders is dramatically increasing.”
Daly’s comments come amidst the Securities and Exchange Commission’s
attempt to raise retail participation in shareholder meetings and reform
so-called proxy plumbing.
According to Daly, the technology underpinning social media can
provide knowledge transfer, voting participation opportunities, and
transparency between shareholders, boards, management, and regulators at
levels that could prevent many of the financial mishaps over the past
“A true Investor social network could both prevent these mishaps and
raise investor confidence,” he said.
Broadridge has a vested economic interest in promoting electronic
social forums. After January 2008, when the SEC adopted new rules under
the Securities Exchange Act of 1934 to ”facilitate the use of electronic
shareholder forums by public companies and their shareholders,
Broadridge developed its proprietary Investor Network.
The firm defines its service, launched in October 2008, as an “online
community where investors and corporations come together to share
information, ideas and perspectives.”
Daly and other Broadridge officials were unavailable for further
comment about the speech or further details on the Investor Network.
Therefore, it cannot be determined just how many US companies have used
the Investor Network or what fee Broadridge charges.
Broadridge acknowledges that investors must remain anonymous and
Broadridge does validate who they are online.
Here is how Investor Network service works: While anyone can view
information on the site, to contribute their viewpoints investors must
provide their online account ID and password they use to access their
They must also agree to a detailed disclaimer. Once verified as
investors, each shareholder is given his or her own page under a
pseudonym showing which companies’ stocks they hold in their portfolio,
along with an indication of how many shares they own. They can then post
comments in discussions about those companies, as well as companies
whose securities they do not own.