Views
Achieving Good Corporate Governance with Centralised, Real-Time Connectivity
As modern companies evolve, good corporate governance extends beyond traditional boardroom policies and annual reports. Companies face growing corporate governance issues such as regulatory demands and stakeholder expectations. Conventional processes are prone to delays and inefficiencies and can hinder transparency and accountability.
Centralised digital platforms offer a solution, ensuring real-time, secure governance communication across the investment chain.
This article explores how issuers, intermediaries, and investors can leverage these technologies to ensure good corporate governance practices.
Meeting governance needs across the investment chain
The advantages of centralised real-time connectivity extend to all participants in the governance ecosystem. However, each group experiences them in unique ways aligned with their specific governance responsibilities. Let’s look at the governance needs of each group and how such solutions benefit them.
For issuers: A direct connection to their investor base
Among issuers’ corporate secretaries or investor relations teams, good governance begins with knowing and engaging their shareholders. They need to ensure that they are able to:
• Identify beneficial owners more accurately and communicate with them directly
• Distribute meeting information in real-time without information loss or distortion
• Monitor voting trends before meetings to gauge shareholder sentiment
• Generate comprehensive post-meeting analytics to inform future governance strategies
• Meet regulatory disclosure requirements with greater efficiency and accuracy
Connected platforms can provide issuers with real-time visibility into voting patterns, helping them engage proactively with shareholders when needed rather than discovering issues only after votes are tallied. This proactive approach transforms governance from a compliance exercise to a strategic advantage.
For custodians and banks: Operational excellence in governance services
Custodians, banks, and brokers face pressure to provide efficient, accurate governance services to their clients while managing regulatory compliance. They need solutions to:
• Streamline proxy voting workflows by eliminating manual data entry and reconciliation
• Reduce operational risk through automated data validation and processing
• Extend voting deadlines for clients through faster information transmission
• Provide value-added services like voting analytics and confirmation
• Ensure compliance with Shareholder Rights Directive II (SRD II) and other regulations
• Centralised platforms help build trust by ensuring compliance is both consistent and effortless.
Using such solutions, custodians can transform proxy voting and disclosure from an administrative task to a value-added service that enhances client relationships.
For institutional investors: informed participation in governance
Proxy voting and responsible investment teams at institutional investors need timely, accurate information to fulfill their stewardship responsibilities. They need:
• Extended research windows through faster delivery of meeting materials
• More time to analyse proposals and make informed voting decisions
• Real-time confirmation that votes have been received and processed correctly
• Direct communication channels with issuers when clarification is needed
• Comprehensive records for governance reporting and regulatory compliance
Centralised real-time platforms enable investors to participate more effectively in governance processes. They support both their fiduciary duties and their broader stewardship objectives, including engagement on Environmental, Social, and Governance (ESG) shareholder proposals and other critical governance matters.
How real-time connectivity bolsters governance principles
The principles of good corporate governance are built on established principles including transparency, accountability, fairness, and responsibility. While these remain constant, connected capabilities represent a digital evolution of the best methods for implementing each of them.
Transparency enhanced through real-time visibility
Transparency in corporate governance has been limited by outdated technology. Centralised digital platforms modernise transparency from periodic disclosures to continuous, real-time processes. Issures can eliminate manual, paper-based processes, supporting sustainable practices in corporate governance as well.
For example, an issuer’s meeting announcements, agenda details, and voting information can flow instantly through secure digital channels like Proxymity Vote Connect. This provides all participants with consistent visibility into governance processes, strengthening corporate governance and eliminating risks associated with outdated methods.
In this environment, issuers can monitor how information moves through the custody chain and observe voting patterns as they develop, rather than waiting until after meetings conclude. They can confirm investors have received and processed their meeting instructions, creating accountability within the system. Investors too can receive instant vote confirmations, unlocking a level of transparency that isn’t possible through traditional paper-based or semi-digital systems.
Accountability strengthened through continuous authentication
Accountability requires clear attribution of actions and decisions. Centralised platforms create digital audit trails that authenticate each interaction, establishing “who did what and when” with unchangeable records.
Additionally, connected platforms like Proxymity enable automated authentication in cases of disclosures to ensure only authorised personnel access confidential data.
This automated, ongoing authentication ensures that each party in the governance process is accountable for their duties, whether they are sharing information, casting votes, or confirming receipts. Issuers can be confident they have accurately reconciled shareholder decisions, enabling true consensus in corporate governance outcomes. Intermediaries can comply with market regulations in a cost effective way as they are able to respond to issuer requests in real-time without the added operational burden and while providing visibility to them throughout the process.
Participation improved through streamlined access
Effective governance in the investor ecosystem depends on stakeholder and shareholder participation, particularly in proxy voting. Real-time connectivity extends participation windows by removing the delays inherent in traditional systems. When meeting information flows directly from issuers to intermediaries and investors without processing delays, voting deadlines can be extended, giving investors more time to make informed decisions while still meeting regulatory requirements.
Moreover, simplified voting and automated holdings reconciliation capabilities further improve participation in governance. Real-time connectivity therefore, maximises participation, fostering inclusivity by empowering a broader range of investors to engage in governance decisions.
Real-world governance transformation in action
Driven by centralised, real-time connectivity, leading financial institutions are now realising the benefits of good corporate governance worldwide. For example:
• J.P. Morgan’s implementation of Proxymity’s Vote Connect Total in the UK and Netherlands demonstrates how real-time connectivity transforms governance processes. The implementation has extended voting periods and enhanced the accuracy, speed, and transparency of the proxy voting process for J.P. Morgan’s clients.
• State Street’s adoption of Proxymity’s Vote Connect Total has streamlined voting for institutional investors, enabling real-time transparency and efficiency in shareholder communications and eliminating manual processes in operational workflows. In these ways, State Strate has reinforced its commitment to modernising governance practices across European markets.
• Glass Lewis’s partnership with Proxymity combines real-time connectivity with Glass Lewis’ trusted governance insights, delivering the firm’s proxy research and recommendations 20 days before annual general meetings (AGMs). Extended voting deadlines and trusted post-meeting vote confirmations also provide investors with greater transparency and control.
• Euronext’s partnership with Proxymity offers European issuers real-time visibility into shareholder voting patterns and detailed analytics ahead of AGMs. Proxymity Shareholder Insights enhances governance by enabling issuers to anticipate voting outcomes, engage with key shareholders, and align strategies effectively.
• Clearstream’s partnership with Proxymity to launch Vote Connect Total North America exemplifies governance transformation on a global scale. By enabling institutional and retail investors to vote seamlessly at US general meetings through Clearstream’s platform, the collaboration enhances transparency, efficiency, and accuracy in cross-border proxy voting, strengthening good corporate governance beyond regional boundaries.
In these ways, centralised connectivity isn’t just changing governance processes—it’s strengthening the governance ecosystem itself.
The future of connected governance
As regulatory expectations continue to evolve and stakeholder demands increase, centralised connectivity will become foundational to good governance practices. Here we highlight several trends that will shape this evolution, driving better strategic planning that benefits everyone involved.
Integrating with ESG frameworks
ESG considerations are increasingly tied to good corporate governance. “Investors are also recognising that tackling climate change demands a new strategy on corporate governance, particularly with evidence showing that many boards lack the ESG expertise to effectively navigate the Net Zero transition,” Jonathan Smalley, Co-Founder and COO, Proxymity, describes.
Connected platforms can facilitate the transmission of ESG-related information alongside traditional governance data, enabling more holistic governance practices that align with the growing importance of proxy advisors’ roles in governance.
Enabling data-driven governance insights
The governance data flowing through centralised platforms creates opportunities for advanced analytics that can identify trends, benchmark performance, and inform strategic decisions. These insights, provided by tools like Proxymity Shareholder Insights, help all participants optimise their governance practices and enhance modern shareholder engagement.
Improving governance across geographies
As centralised connectivity solutions expand across global markets, cross-border governance will become more efficient and effective, reducing the complexity of governance for multinational corporations and global investors. Tools like Proxymity Shareholder Disclosure enable secure connectivity between all parties, no matter their geographical locations.
A digital foundation for the principles of governance
While longstanding principles of corporate governance remain constant, centralised, connected, real-time technologies are redefining good corporate governance today. They serve as a foundation for greater transparency, accountability, and participation in governance, connecting all stakeholders in secure digital ecosystems.
FAQs about good corporate governance
What is good corporate governance?
Good corporate governance refers to the systems and processes that ensure a company is managed effectively, balancing the interests of shareholders, management, and other stakeholders.
What are the pillars or principles of corporate governance?
The core principles include transparency, accountability, fairness, and responsibility, which guide ethical and effective decision-making within an organisation.
What are some common corporate governance issues?
Common issues include conflicts of interest, lack of transparency, insufficient accountability, inadequate oversight, and ethical violations. These challenges can undermine trust and operational effectiveness if not addressed. For information, check out our recent article, which details common corporate governance issues and how to solve them.
To learn more about the benefits of real-time, centralised connectivity in corporate governance, contact one of our experts directly.