Banco Santander, S.A. (ADR) (NYSE:SAN) & Broadridge Financial Solutions, Inc. (NYSE:BR) recently completed a pilot run of blockchain for investor voting at an annual general meeting (AGM) in collaboration with JPMorgan Chase & Co. (NYSE:JPM) and Northern Trust Corporation (NASDAQ:NTRS). Banco Santander Corporate Services served as the issuer’s agent while the blockchain lab of Santander was used for the voting purpose.
Pilot Run Carried Out Parallel To Traditional Voting
The two companies conducted the pilot test on March 23rd. They believe that implementation of blockchain technology in the voting process increases transparency, operational efficiency, security and analytics and proves extremely beneficial to investors, issuers, agent banks, and custodian banks. The pilot run was carried out during the AGM parallel to the traditional way of the voting so that proxy voting is digitally registered simultaneously. The co-collaboration model was also shared with the additional custodians who were part of the Santander AGM.
The global head of shareholders and investor relations at Santander, Sergio Gamez said, “Having very fragmented capital, it is very important to ensure the participation by investors and shareholders, and this year using blockchain technology for the institutional vote has been a great help in terms of transparency and agility across the vote lifecycle”. A year before, both the companies carried out blockchain proof of concept in proxy voting in partnership with its two global custodians.
Blockchain Technology-Based Voting Is More Efficient
Prior to this pilot-run of blockchain-based proxy voting for investors, Santander, the largest bank in the Eurozone by market capitalization, used the technology in its last AGM. The institutional investors who own 60.7% of the capital in the bank having more than four million shareholders got a first-hand experience on how their votes were counted and confirmed with great speed (almost instantly) with the blockchain technology. In general, it takes around two weeks for the process of counting of votes to complete when conducted through manual activity by different intermediaries.
21% of the number that participated in the AGM participated in the new platform as well. Trade analysts believe that this could be a first step towards bringing improvement in corporate democracy and motivation foruninterested investors to vote.