Shareholder Engagement and Shareholder Voting Modes: Two of a Different Kind

Abstract

This paper provides evidence that remote voting became the current technique for voting. Based on data for French companies, I found that gradually more and more shareholders, and not only institutional shareholders, vote in absentia. While a controlling shareholder continues to participate and vote in the general meeting in personam, other large shareholders, including institutional investors, make use of the technique of remote voting. Next, a decreasing group of shareholders with very small stakes attend the general meeting in person or empower the chairman of the board to vote. Consequently, shareholder engagement cannot take place in the general meeting. The ‘forum function’ of this “physical” general meeting of shareholders as the place where presentations by the board are followed by a fruitful debate and discussion with the shareholders helping to further form their opinion before issuing an informed vote, is eroded. New technological developments should be considered for shareholder engagement. Distributed ledger technology, like blockchain, is certainly one avenue that deserves further study to serve as an alternative tool for the development of the voting and communication process in an accessible, open and transparent way.