Firms have one year to introduce electronic voting for shareholders

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Firms have one year to introduce electronic voting for shareholders

Nick Huber
Companies have until next year to introduce electronic voting for shareholders before they are named and shamed, a new report has warned.

The report, from the Shareholder Voting Working Group, called for companies to introduce electronic voting for shareholders to replace the current paper-based system that is "riddled with errors".

Last year, Unilever, the Anglo-Dutch food and household products group, found that the votes of three major institutional investors had gone missing.

"Electronic voting is the key to a more efficient voting system, and all parties - issuers, institutional investors and intermediaries - need to make a conscious effort to introduce electronic voting capabilities in 2004," said Paul Myners, chairman of the Shareholder Working Group, whose members include the Association of Investment Trust Companies and the National Association of Pension Funds.

"I propose to revisit the subject in a year's time to assess the extent to which the relevant participants have introduced electronic voting capabilities," he said.

Mike Jones, chief executive of City Compass, a think tank and research group, said electronic voting could be done securely via a company's website.

"I do not think there would be a technical problem at all, secure transfer codes could be used on the website, similar to payment systems," he said.

Settlement company CrestCo was the only company cited in the report as having introduced electronic voting for shareholders, but the report added that take-up of the new voting system had been disappointing.

The report was welcomed by the government's industry minister Jacqui Smith, who urged firms to implement the report's recommendations.

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