Frequently asked questions (8)

What is a proxy, and why do we need proxies?

A proxy is a letter empowering one person to act on behalf of another. In many cases it is not possible for individual shareholders to attend a meeting like an AGM themselves, so they would rather instruct someone else to vote (or speak) on their behalf. It’s a very common procedure. Whenever the shareholder is a company, for example, a proxy is required because a company cannot act by itself and therefore cannot attend and vote. Proxy forms have a prescribed layout, and you need to use the form in use by each specific company. We provide these on our website in electronic format for you to download; they are normally also available from the company secretary or the transfer secretaries.

Why should I consider voting?

Attending an AGM, asking questions or addressing the meeting is a good way to make your views known to the directors and executive management who provide the company with direction. They in turn will guide management on the best way forward. Voting is the ultimate tool for shareholders who would like to improve the way a company acts.

Is there any point in voting if I own only a few shares?

Directors are used to seeing their resolutions passed with 99% or even 100% of the votes present at the AGM. For this reason even a relatively small “NO” vote gets their attention – especially on sensitive topics like executive remuneration. Many individual shareholders are surprised that there could be others ‘out there’ who actually agree with their concerns. In our experience there often is significant agreement. Voting even a small number of shares makes sense especially if hundreds of others are doing the same; so yes, there is always a point in voting, just as there is a point in attending an AGM and making your opinion known.

What are the Proxy View Std and Core reports that we are selling?

As regards our Pv Std report: We are allowing you to peek over our shoulder at how we would complete a proxy form reflecting the way we would have voted in respect of each of the resolutions put to shareholders, based on our voting policy guideline. You might not always agree with our views, but you will be able to see them and be able to decide for yourself. We have been involved in business for many years; we are convinced that there are many things that can be done better; and we know the rules. In addition, we engage with stakeholders frequently and adapt our views when there is a clear change in expectations, as long as these expectations fit in with the soundest of corporate governance approaches and application. Our voting policy guideline thus reflects criteria that we apply consistently, with the proviso that there is a continual slow change in stakeholder interest expectations.  Our internal process involves several individuals who serve as a check on one another under the leadership of Theo Botha.  To help you decide whether you’d like to buy, we indicate how many ‘For’ and how many ‘Against’ positions we would have. Normally we set out the reason for every ‘Against’.

As regards our Pv Core reports: These reports reflect our views on the level of disclosure, transparency and fair treatment of shareholders, achieved by the board and management of an issuer.  They are based on a scrutiny of the published documents of the issuer for the financial year as indicated, covering executive remuneration, environmental, social and governance issues, as well as other matters we consider to be of importance to shareholders.  Read with our Pv Std report, they enable a shareholder to gain a better understanding of the views expressed herein, enabling him/her to exercise their share-ownership rights and to vote in an informed manner at such issuer’s AGM.

I’m a shareholder but I’m not getting notices of AGMs or annual reports: why?

There might be a problem with the address recorded for you in the records of the company, especially if you still hold actual certificates for your shares – check with the share’s registrar and keep this updated – but the most likely reason is that your shares were ‘dematerialised’ (see here) and you were asked whether you wish to receive annual reports and similar information in future. Somehow that box was ticked ‘NO’. This is the default option, unfortunately. You may choose ‘YES’ – there is no cost involved. If you prefer electronic communication, make sure you have specified that. Keep your contact details and preferences updated with your broker and CSDP (see below – What is a Central Securities Depository Participant [CSDP]).

What happens if there is an amendment to a resolution that is only raised at the AGM itself?

An amendment means that the essence of the resolution is retained but there is now a change in emphasis or a limitation that did not exist in the original wording. Some standard wording of proxy forms allow for such a situation because they state that the person holding the proxy is (otherwise than set out in the proxy itself) free to vote as he or she believes to be appropriate. In such a case you need to trust the holder of your proxy enough to rely on his or her judgement.

In other cases the proxy is silent in this respect and your holder will only be entitled to vote as you have specified. An amendment might thus come up that you have not anticipated, and the proxy holder will vote as if no amendment has taken place.

There unfortunately are also cases where resolutions are withdrawn at the meeting itself.

Can the holder of my proxy, speak or ask questions at the AGM?

Yes, as long as the wording on the proxy form allows this – which is normally the case. Those questions will normally be accepted and recorded as questions by the holder, not by you, unless you ask that they be recorded as your questions and the proxy holder informs the meeting that way. If the proxy holder is acting for a company, though, the practice is for the name of the company to be recorded alongside the name of the speaker.

What is a Central Securities Depository Participant [CSDP] ?

‘Participant’ means a person authorised by Strate to perform custody and administration services or settlement services or both in terms of the Strate Rules, and includes an external participant, where appropriate.

Source: Strate