By Valentin Quisquater
17 Apr 2023

Digital Transformation in 2023 Voting Season: Enhancing Shareholder Democracy and Engagement in Asset and Wealth Management

As we move through the second quarter of 2023, the Asset and Wealth Management sector is witnessing a significant shift in the way voting processes are conducted. The digital transformation sweeping the industry offers a unique opportunity for stakeholders to enhance engagement and foster shareholder democracy.

The need for digital solutions has become increasingly evident in recent years, as traditional paper proxy voting processes have faced challenges around low engagement and time-consuming procedures.

Based on Paragon’s experience of engaging with clients on voting services they cite the advantages of multi-channel options for investors to cast their votes, in line with their preferences, as a key reason for embracing digital solutions. In addition, these digital systems allow for instant vote processing and seamless integration with mandatory reporting, streamlining the entire process.

Digital proxy voting technologies, such as those offered by Paragon, have emerged as an effective means to streamline the voting process. These tailored, scalable, and secure multi-channel voting solutions allow organisations to navigate the complex landscape of corporate governance with ease and efficiency while adhering to regulatory compliance.

The benefits of adopting digital voting solutions extend beyond mere efficiency. Digital proxy voting technologies empower shareholders and foster better communication between boards and their shareholders. This shift enables corporations to focus on the interests of all stakeholders and broader society by providing real-time proxy voting and enhanced transparency.

During the 2022 proxy voting season, shareholders submitted a record 924 ESG-related proposals to US companies, according to Georgeson. This trend underscores the growing importance of shareholder engagement on issues such as climate change and corporate governance.

The 2023 voting season will be a critical test for digital transformation in the Asset and Wealth Management sector. With investors and boards facing debates on issues ranging from climate change to board pay, the adoption of digital proxy voting technologies is expected to play a pivotal role in fostering shareholder democracy and strengthening investor relations.

As the industry continues to embrace digital solutions, companies across the globe can seize this opportunity to enhance their investor relations by pushing for more transparent and effective forms of shareholder democracy. In doing so, they can better serve the interests of both their shareholders and society as a whole.

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