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Electronic Participation in Shareholder Meetings

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"E-Meetings" Program Reference

 

For a subsequent response addressing investor interests, see

 

 

Forum Report: Electronic Participation in Shareholder Meetings

 

SEC Invitation of Comments on Proxy System Reform

Many participants in the Shareholder Forum’s “E-Meetings” program have been interested in the SEC’s announced review of the “proxy plumbing” involved in shareholder communications.[1] While the debates about administrative details of managing stock ownership and voting records may be too complicated for some of us, the ultimate objectives of decision-making information exchanges should be clear to every investor and corporate manager. This “user” perspective, as distinguished from the interests of service providers,[2] is important to the SEC’s understanding of what communications need to be supported.

The SEC has shown its interest in considering your objectives by initiating a request for the Forum’s submission of its October 6, 2010 Forum Report: Survey of Investor Communication Priorities for Voting Decisions, so that it can be formally available for their reference. My responsive cover letter[3] offered this summary of investor interests:

The survey shows that there is significant investor interest in direct communication with corporate managers for information relating to voting decisions, and also provides indications of the types of communication processes that may be appropriate to respond to investor information requirements. The viability of these means of information exchange will of course depend on the SEC’s response to the issues raised in the Concept Release.

Stating your own interests now will help to guide the development of regulations that effectively support those interests. We can assume that the SEC appreciates the need to update our obsolete “proxy plumbing” during the next year or two, one way or another, to make it globally competitive. While some improvements can be made by marketplace adaptations – for example, the independent shareholder verification process developed in the Forum’s special project – essential functions such as the counting of valid votes will require regulatory reform. It is important that this regulatory reform be designed to support the ultimate interests of investors and corporate managers in informed decision-making, and it is up to you to help the SEC understand these interests.

Any Forum participant with an interest in improved communication and voting processes is encouraged to offer comments to the SEC by October 20, 2010. Instructions for doing so are available on the SEC’s web site, and the following article provides very useful guidance:

While it is the Forum’s normal practice to address marketplace decision-making rather than regulatory processes, we will in this case be pleased to report to the SEC any comments of Forum participants who wish to offer their observations anonymously for public consideration.

GL – October 14, 2010

 

Gary Lutin

Chairman, The Shareholder Forum

c/o Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com


 

 

 

 

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of standards for conducting shareholder meetings with electronic participation. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was encouraged by Walden Asset Management, and is proceeding with the invited leadership support of Broadridge Financial Solutions, Inc. and Intel Corporation to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to e-mtg@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.