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Santander, Broadridge complete investor voting pilot

Tony Zerucha

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  • Benefits include increases in transparency, efficiency and analysis
  • Addresses regulatory shareholder rights concerns

Banco Santander and fintech services provider Broadridge Financial Solutions have successfully completed a trial for investor voting at an annual general meeting (AGM). Benefits cited by the companies include enhanced global proxy vote transparency and increases in operational efficiency, security and analytics.

The pilot was conducted at the March 23 Santander AGM with Banco Santander Corporate Services as issuer agent and Santander’s blockchain lab participating. Blockchain technology was deployed to produce a “shadow” digital register of proxy voting taking place in the traditional model and was extended to additional participating global custodians.

Santander has more than four million shareholders, with institutional investors owning 60.7 per cent of capital. Those investors saw the voting tabulation process be completed the same day at the 2017 AGM. With 21 per cent of the votes counted by the blockchain-based method, and the benefits clear, it is hoped it will encourage more shareholders to participate in the voting process.

Back in 2017 Santander and Broadridge conducted a proof of concept of the blockchain technology in partnership with J.P. Morgan and Northern Trust. Since then Broadridge has built a distributed network on the Quorom blockchain platform.

“The annual general meeting is one of the most important corporate governance events for any listed company,” Banco Santander’s global head of shareholder and investor relations Sergio Gamez said. “In the case of Santander, having very fragmented capital, it is very important to ensure the participation by investors and shareholders, and this year, using blockchain technology for the institutional vote has been a great help in terms of transparency and agility across the vote lifecycle.”

Vote confirmation to final investors is an important feature of the updated European Directive on Shareholder Rights due to be enacted in June, 2019. That requires intermediaries to share information on the same business day.

 

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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