The Shareholder Communications Coalition, an organization comprised of five entities – The Business Roundtable (BRT), The National Association of Corporate Directors (NACD), The National Investor Relations Institute (Niri), The Securities Transfer Association (STA) and The Society of Corporate Secretaries & Governance Professionals (SCSGP) – launched a campaign on October 29th to improve the participation of the shareholders at meetings. The creation of a website (www.shareholdercoalition.com) is part of the efforts to show the challenges concerning the issue and a global mobilization to review the current system of proxy voting.

According to the coalition, a review of standards is becoming increasingly necessary in the face of a number of abusive practices resulting from the leasing of shares and the use of complex derivatives that disguise the presence of investors. One of the claims was directed towards hedge funds that use these mechanisms to expand holdings without drawing attention and, from there, influence the voting process.

For Jeffery Morgan, CEO of Niri, legal developments in the last years, such as the Sarbanes-Oxley Act, increased the transparency of the financial market. “However, the proxy rules have been in effect for decades. Now is the time to promote changes that improve companies’ capacity to identify their shareholders and communicate with them,” he said.

The association also believes that practices on proxy votes are out of date. “Good corporate governance practices demands that the integrity of the proxy vote and the efficiency of communication between companies and shareholders be assured”, commented John Castellani, president of BRT.