derek abdinor

Electronic communication to shareholders is a philosophy as much as a practice – where possible collect email and mobile addresses of your shareholders to communicate directly, and cut down the costs associated with being a listed company, eg on the JSE.

Polar Bear

1. Because there is an argument for and against, there is doubt. Which means there is no consensus, so policy shouldn’t change. If the water is muddied enough, no-one can tell if there is or isn’t something in the water.
2. The signs are there for climate change and for electronic comms, it is a visible thesis. This is the reason that both phenomena have legs, because we witness climate change and we witness greater use of electronic delivery.
3. The toothpaste can not be put back in the tube. We can set a level of sustainability of life, but all the seas of plastic and remnants of carbon will be here for a long time to come. In the same way, the internet and email can not be stopped.
4. Change will come from below. Our generation and those before had different mandates, so the kids will have to fix this mess. Ergo, the Digital Natives wrote school assignments on computers and with the internet. They are now administering your pension fund and don’t know what a masthead is…
5. These problems come at the right time to create a perfect storm, which means the problem will either be faced and solved or not. Environmental issues (ironically!), shareholder activism, financial crisis et al have demanded that we look at electronic comms.
6. The world expects instant information and instant fixes. The battles between bank queues and online banking, tax returns and e-filing,  memos and email have been won.
7. It is an obligation to be fulfilled – looking after the environment is a legacy issue for generations to come; communicating to shareholders, to those who fund your growth, in their preferred manner is a duty.

In discussion the other day we were puzzled as to why the majority of companies on the JSE do not take advantage of Schedule 23 for their regulatory communications to the market and shareholders.

For issuing companies to embark on an electronic consent program, the following benefits accrue to company and shareholder:

1. Email addresses of shareholders for direct communication
2. Mobile numbers and landline numbers if proffered
3. Reduced printing and mailing costs
4. More cash in the kitty for dividends or retained earnings
5. Saving the planet
6. Training your shareholders to come to your official website as the #1 source of fact, news and comment

There are even more reasons to clean up one’s share register, embark on an asset reunification project  (tidying up unclaimed dividends) and ALL of them do credit to your brand. How you choose to spin it, be it by planting a tree for every shareholder converted or a reporting unit in your sustainability report, is up to you.

In South Africa, where public monies are involved, its always only a matter of time before the issue becomes politicised.

<pause for effect>

It follows that employing good shareholder communication governance NOW is better than having industrial action in a few months or years, at your AGM or outside your glass doors.

I thought I’d capture all the links as they appear in Google news – to represent the news as and where it comes out.

Microsoft shareholders to get ‘say on pay‘

Microsoft’s board says it will hold a non-binding, advisory shareholder vote on the salaries of the company’s executives every three years, starting with …

Microsoft OKs Shareholder Advisory ‘Say On Pay‘ Wall Street Journal

Microsoft’s Board Enacts Say-On-Pay Advisory Vote Bloomberg

Microsoft approves ‘say on pay‘ shareholder vote Seattle Post Intelligencer

Reuters

all 88 news articles »

MSFT - HKG:4338

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Microsoft Board Authorizes “Say-on-Pay” Advisory Vote on Executive …

While insider trading and short-selling are largely strictly regulated and, on the face of it, discouraged, in most markets, there is an academic argument in favour of the two practices.

From The Telegraph:

At first blush the argument in favour of insider dealing was seductive. An insider who bought or sold shares had intimate knowledge of the company’s financial performance. Armed with this knowledge, he was best placed to assess the true value of the share, so where the share was undervalued or overvalued an insider’s intervention ensured a correction occurred…

… As with insider dealing, the arguments in favour of short selling are impeccably logical. Economic theory suggests that short selling contributes to accurate share valuation since it enables share value to reflect the negative perception of company performance that market participants have formed. In this way short selling promotes an orderly adjustment of the stock price.

The topic revolves around information, and the communication thereof. Insider traders enjoy privileged information, which is bound to come from intimate knowledge of management personnel, strategy, operations and risk positioning.

In that case, sell-side research, already hamstrung, is not going to be worth a tranche.

Sasol’s empowerment transaction earlier this year was worth over R25 billion and added about 200 000 new shareholders to the Sasol share register. The impact at the AGM was apparently marked, with new members wanting materials in different languages and different formats. 

From Fin24:

 ”Why are the presentations only in English, when you have many black shareholders represented in the room?” asked another shareholder.

“You ask us to vote for or against directors but you fail to even provide us with a picture or introduce the directors we are voting on,” commented another.

Many black representatives appointed through BEE deals have been criticised for being token representatives to boards of listed companies.

Despite the description of “empowered” companies, people point out that the white directors and CEOs who still represent many of these businesses do all the talking at presentations.

The Sasol AGM took a step to dispel that impression when Benny Mokaba, executive director of Sasol, was pressed into a new role as translator.

Mokaba took responsibility for translating shareholder questions for Sasol chairperson Pieter Cox and Davies. Shareholders who had been frustrated by not having the opportunity to voice their questions in a mother tongue suddenly became confident enough to ask the questions they had sought answers for.