Broadridge to U.S. Corporations: Tell Employees to Vote

Richard Daly, chief executive of Broadridge Financial, is lobbying 1,000 of the U.S. largest corporations to encourage their employee shareholders to vote.

“In 2010, just one in 20 individual retail investors voiced their opinions about the companies they invested in by exercising their fundamental shareholder right. That compares to recent historical levels four to five times as high,” said Daly who spoke at the National Press Club in Washington DC on Tuesday morning. “Public companies need to understand the seriousness of this issue and act to reverse this troubling decline to get each of their individual investors --- and all individual investors generally --- engaged with their companies.”

Although Daly said that Broadridge won’t benefit financially from increased voter participation he did encourage corporations to facilitate “two-way digital communications” for their employee shareholders and other individual shareholders. In March, Broadridge, the world’s largest proxy mailing and voting firm said that investors could cast their votes for or against corporate agendas through Verizon’s new Apple iPhone 4, as well as the Blackberry, Android, Microsoft, tablets and other smartphone platforms

Daly said that a relatively small increase in voting participation by employees could meaningfully increase individual investor voting participation from five percent per year to twenty percent or more annually.

“Companies that can distinguish their investors’ opinions from others’ will more easily have the strength and confidence to stay on course and create value,” said Daly. “There is no greater show of support than the ballot, or in this case, the proxy.

Daly’s speech was the second one in recent months to address waning retail participation in annual meetings. However, in the last one in December he called on the SEC to give public companies the right to social media technology to communicate with their shareholders.

Both presentations come amidst the Securities and Exchange Commission’s attempt to raise retail participation in shareholder meetings and reform so-called proxy plumbing. After January 2008, when the SEC adopted new rules under the Securities Exchange Act of 1934 to ”facilitate the use of electronic shareholder forums by public companies and their shareholders, Broadridge developed its proprietary Investor Network.

So far, retail investors haven’t completely embraced electronic voting as shown by voting rates for issuers adopting the Securities and Exchange Commission’s so-called notice and access rule. Over 3,000 corporations have decided to take advantage of the notice and access rule, according to Broadridge, saving $700 million in printing and postage fees. However, only four to five percent of retail investors voted when they received a notice of the availability of their proxy materials electronically through the notice and access rule. That’s a far cry from the 20 percent who voted when they received a full set of proxy materials and ballots through the mail.

Effective 2007, the notice and access rule lets U.S. corporations allow investors to automatically receive a notice in the mail on where they can go online to find their annual reports and other proxy materials. Once there, the investors can cast their votes for or against corporate agendas from a keyboard.