Premature E-critique?
I read your article in the Spring 2000 edition ("E-voting, By Gum") with
interest but felt that I should correct a few misunderstandings and
misconceptions which are currently in circulation with regard to so-called
electronic voting.
Turning first of all to Goldman Sachs, any comment
regarding their role in the technology due diligence process would be entirely
speculative since Goldman's role was as an independent and factual systems
auditor not an arbiter of which system would better suit the NAPF's strategic
or commercial requirements. Any endorsement or impression of endorsement by
GSAM would, therefore, be no more that PR "spin."
Turning to the substantive technical aspects of the article:
Manifest has, for the past four proxy seasons, automated the voting process as
far as it is legally possible to do so. This has included producing
agm/egm/class and court meeting notices in a standard format for online
delivery straight to the fund manager's desktop PC, together with soft proxy
ballots for each account showing the number of shares owned.
As early as
1996, Manifest's coverage has reflected our customers' portfolio requirements.
A number of our funds are index trackers which requires a tremendous breadth of
coverage. It is only in the past year that other services have recognized the
illogical position of only voting a portion of a portfolio and so amended their
coverage. For any voting service to claim that every stock quoted in the UK can
be voted electronically is somewhat premature-it is, after all, up to each
company to decide what it will or will not permit by way of electronic
appointment. Some may elect only to accept faxes and they would be perfectly
within their rights to do so.
Manifest offers Internet delivery to those
who want to use it or more importantly, able to use it. For those who cannot (a
large number), we have a modem-based service which is just as much online. The
Internet is only one delivery mechanism; it is not a processing or management
tool. The key point about any transaction processing system is that it should
be secure, robust and fulfill its role efficiently and effectively.
All
voting agents must vote under power of attorney-including E-vote and ADP. We
cannot do otherwise-no voting agent can do otherwise-it wouldn't be legal. The
law is also very clear that proxy poll votes must be received 48 hours before
the meeting in order to be valid. After that time it requires physical presence
at the meeting. Contrary to the suggestion in your article, VotePlus does allow
votes to be amended after they have been submitted for tabulation. Even if a
vote has been lodged ahead of time, our customers can still amend their
intentions.
No system can permit users to "vote the stock on the screen,"
nor can the entire process be automated from the outset"-that would require a
wholesale change in the Companies Act. Even post the E-Commerce Bill, it will
not be possible to vote in the way that is suggested in your article. The UK
system is built around proxy poll appointments, that is to say, in the event of
a poll, the institution has appointed the chairman to cast the poll votes as
indicated on the proxy form. A poll will only be called in the event that the
show of hands at the meeting does not reflect the will of shareholders in
total.
Votes are an essential right of share ownership. Although custodians
play a crucial role as the guardians of assets, they are not the owners. Being
the name on register is an administrative and legal technicality. In the UK,
Manifest has pioneered the concept of giving owners the most appropriate tools
for managing their proxy voting process, without the need for additional and
unnecessary layers of administration. After all, the most direct route from A
to B is not via P Q R and S.
Modernizing the voting system has not been
easy or straightforward. Nor is the modernization process best served by
articles which present a confusing, and many times technically incorrect,
perspective of what is legally possible. In order to give a more rounded view,
perhaps we could look forward to seeing future articles on voting focused on
the practicalities, including, for example, comments from registrars?
Yours
sincerely,
Sarah Wilson, Managing Director, Manifest
Global Custodians
Summer 2000
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