UK/NETHERLANDS – Institutional investors who fail to vote at annual meetings could face a grilling by companies if Unilever’s example sets a precedent.
The Anglo-Dutch consumer products group has written to the 10 institutional shareholders which failed to vote at an annual meeting in May to ask them why.
Said a spokesman for Unilever: “Corporate governance is very much in the front of the mind at the moment. We needed to know whether the shareholders were abstaining, whether they didn’t like something about the company, or whether it was a result of technical errors.”
Of the 10 unnamed investors, one had voted but there had been a mix-up in names, one did not reply to the letter, two said it was their policy not to vote, three said they just didn’t vote, and three said they did vote, but there must have be technical problems.
Unilever is now focusing on the latter three. Apparently the three investors had issued instructions to their parties to vote on their behalf, but these were not properly carried out. Unilever has already audited each stage of the voting process for two of the shareholders and has invited the Department of Trade and Industry to help with the last investor.
The spokesman said it was too early to say what the issues had been, but there would be some conclusions drawn eventually.
The case of missing votes is not entirely new, and is causing some concern within the industry. Richard Singleton, director, corporate governance at ISIS Asset Management points out that often it is difficult to know that your votes have been received. “As shareholders tend not to get confirmation of their votes, it can happen that votes don’t get through but it goes unnoticed.
“Depending on the issue, we sometimes write explaining our vote in addition to voting to ensure that our opinion is registered. Concern has been expressed among the industry already, and efforts are being made to look into what is really happening.”
Singleton also welcomes Unilever’s decision to contact investors from which it did not receive votes. “It is wrong to require voting by shareholders, but it is important to understand your investors, and find out why they didn’t vote.”