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Subject 11. Shareowner Proxy Voting
#cfa #cfa-level-1 #corporate-finance #the-corporate-governance-of-listed-companies-a-manual-for-investors
Investors should determine whether the Company permits Shareowners to vote their shares by proxy regardless of whether they are able to attend the meeting in person.

The ability to vote one's shares is a fundamental right of share ownership. A company's rules governing shareowner-sponsored board nominations, resolutions, and proposals are generally supportive of shareowner rights, but the rules and the procedures for exercising such rights should not be prohibitively cumbersome. If this is the case, shareowners cannot readily address their concerns in order to protect the value of their shares.

Sometimes a Company makes it difficult for Shareowners to vote their common shares by not allowing them the right to vote by proxy or by accepting only those votes cast at its annual general meeting. In examining whether a Company permits proxy voting, investors may ask questions like:

  • Is proxy voting permitted?

  • How easy it is for Shareowners to cast their votes by proxy?

    • Does the Company offer electronic delivery of proxy materials? Can Shareowners view proxy materials online?
    • Do Shareowners have to attend annual general meeting to vote or does the Company offer telephone or Internet voting (or some other remote mechanism)?
    • Does the Company coordinate the timing of its annual general meeting with other Companies in its region to ensure they don't hold their meetings on the same day but in different locations? In some regions that require Shareowners to attend such meetings to vote, Shareowners may not be able to attend all the meetings if they are held at the same time in different locations.

  • Is the Company permitted to use share blocking? Proxy voting in certain countries requires share blocking. Shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting (usually one week) with a designated depositary. During this blocking period, shares that will be voted at the meeting cannot be sold until the meeting has taken place and the shares are returned to the clients' custodian banks.

  • What are the state proxy regulations governing the Company?
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