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Corporate democracy in the digital age

Annual shareholder meetings are outdated. They were created in the analogue age. In the past shareholder meetings were rated for their refreshments as much as their content and large institutional investors didn’t usually attend. Such meetings remained the purview of the retail investor.

But the pandemic has changed all of this.

Archie Norman, chair of Marks and Spencer, outlined steps forward in removing the corporate veil in a recent opinion piece in the Financial Times. He argued for a need to change the Companies Act so that every shareholder can be engaged digitally throughout the year. This is a breath of fresh air.

When, as an Investment Banker at JP Morgan, working with BP’s Lord Browne to acquire Amaco, the American Oil Giant for $48 billion I attended the Extraordinary General Meeting on 25th November 1998. The meeting was full of excited shareholders many of whom had held their shares for many years and had no intention of selling them. The event was as much a social gathering as it was to fulfil a legal mandate, that is to approve the merger. There were many questions, but one stood out: “Will the Amaco torch burn brighter than the BP sun?” referring to the corporate logo of each company, wondering which one will be victorious.

An odd question for most, but a central one for those who invested solely in corporate Britain. Providing a platform for such questions is fundamental to corporate democracy, recognising that each shareholder is not only an owner of the company but they have a right to question the board. 

But, as Archie Norman says, we have seen a big decline in popular shareholder democracy. This needs to be addressed not only from the old in-person General Meetings but also in the way information is made available to all shareholders, equally.

Prior to in-person shareholder meetings, the Board are well briefed by their advisors to ensure that any market-sensitive information has already been communicated primarily through analyst briefings and select institutional investors via private sessions. This further reduces the value of a shareholder meeting.

Roll on Digitalisation

“True digitalisation of our regulatory framework will democratise and not dilute shareholder voices,” says Archie.

The Pandemic has driven many more to engage digitally. Whether it’s to share your vaccination status in exchange for freedom or to order groceries, more and more of the population are becoming digitally savvy. I could never have imagined a few years ago that my 83 years old mother would us FaceTime to connect with me while she was charging the electric car in the driveway. “I have to learn.” As she says.

This trend could be harnessed to update corporate engagement. Paper, pens and wet-ink signatures could be all replaced with digital connectivity and identity verification while the citizen is positively inclined to accept and adopt new digital processes.

A digital AGM is one positive step, but a digital communications platform that could be used to disseminate corporate information at one end and provide ESG and financial data to auditors at the other, could be a step change for shareholder democracy.  This is where blockchain technology can help.

Blockchain is the technology behind a distributed network of computers that can be used to store data securely but which, uniquely, has a single memory – a single source of truth. That means data cannot be freely copied and edited to create an alternative version of the truth, which is why blockchain technologists refer to it as the “trust platform”. 

Storing data on a blockchain ensures greater validation, verification of the data that is stored immutably. This in turn generates trust in what companies are telling us, knowing that their claims are evidence backed. Information for public consumption could be permissionless, while on the other hand, should an audit be required, the data is accessible with the right permissions. Blockchain creates transparency and tamper-proof accountability to support corporate information dissemination.

Moving to an environment where more information is made available to a breadth of shareholders from the largest to the smallest, requires a rethink of how we communicate and how we track our communications.

Digitalisation doesn’t need to stop there. Blockchain can further automate the process of corporate actions including share certificates, dividends, voting and offers. These processes are still manual and in dire need of an upgrade. It is estimated that over US$1 billion is lost each year and poor communication leads to trading losses of over US$1.6 – 8 billion annually (source: Contemi, July 2021).

The current regulation stifles companies’ ability to communicate with its shareholders and as Archie Norman says “the time has come for the government to recognise the need to rekindle shareholder democracy. Enabling digital AGMs is one aspect. Another is enabling direct communication.”

I support Archie’s recommendation to update the old analogue Shareholder communication frameworks in favour of one that if fit for the modern day. Digital technologies will attract investment and broaden the shareholder culture in the UK.





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Nish Kotecha

Nish Kotecha

Co-Founder & Chairman


Member since

11 May 2021



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