Next-Generation Proxy Voting

As the industry continues to evolve through rapid advancements in technology, so do the tools funds can use to improve the accuracy, transparency, and efficiency of the proxy voting and solicitation system.

“While mail — both hard copy and email — and phone calls are still important tools in engaging fund shareholders, we’re always striving to find new ways to encourage participation,” said Michael Collins, Vice President and General Manager, Mutual Fund Proxy Solutions, at Broadridge Financial Solutionsduring a recent #WebinarWednesday event.

Collins moderated the panel, in which thought-leaders from Broadridge and Phillips Edison detailed how data-driven analytics, omnichannel delivery, and blockchain are helping mutual funds achieve their proxy goals.

When it comes to proxy voting, Collins said funds must be far more proactive, as low retail voting rates pose serious risks for funds. “If a mutual fund cannot attain quorum, the ramifications may be costly,” he said. “Mergers might be abandoned, advisory contracts can lapse, and funds may forfeit incurred expense with having to do the processes without successfully completing their objectives.”

Funds can execute data-driven campaign planning and management strategies to properly prepare for proxy voting. Collins said when funds build a proxy solicitation campaign around discretionary voting, they can specifically target brokerages that hold a large number of shares, achieving quorum faster and more efficiently.

Funds should also attempt to deliver more impactful communications. “An omnichannel approach combines the best of both worlds, augmenting physical and digital communications to drive participation,” Collins said.

It’s also important to focus on shareholder and advisor education. “When we look at a campaign, we’re trying to identify the best way to communicate with shareholders,” Collins said. “Oftentimes, that’s going to be through their advisors; we need to have those advisors informed and knowledgeable to help navigate shareholders through the process.”

Michael Koehler, Director of Investor Relations at Phillips Edison, said Broadridge helped his organization use social media to make voting easier for shareholders. Phillips Edison was initially concerned that their average investor, between the age of 65 and 70 years old, would prefer hardcopy communications.

“After working with Broadridge, we found social media to be effective in reaching our shareholder base,” Koehler said. “Out of 40,000 investors in a recent campaign, 22,000 saw our social media ads, and on average each person saw it about 14 times.”


Elizabeth Maiellano, Vice President, Product Management at Broadridge Financial Solutions, explored ways blockchain can be used to transform the vote processing and reconciliation process. “Typically the first association made for blockchain is cryptocurrency, but as a distributed ledger, it can support many other use cases,” she said.

Maiellano highlighted the activities and proofs of concepts (POCs) Broadridge has undertaken to understand the benefits of blockchain, which streamlines proxy voting using distributed ledger technology to generate a shared and immutable record of all voting activity.

In November 2018, Broadridge completed a successful pilot with a corporate issuer using distributed ledger technologies to process voting for their annual general meeting. The organization has also found the results of several POCs to be promising in terms of improving transparency, security, and efficiency.

“There’s been a view out there that this is a solution searching for a problem, but that’s receding now because these cases are being proven,” Maiellano said. “I think the demand for end-to-end confirmation will continue to grow.”

NICSA thanks Broadridge for sponsoring this webinar. Members can replay an archived version of the event at any time by clicking here.

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