Tricor’s SPOT e-meeting platform
Improving Governance and Shareholder Engagement
Tricor is a leading business expansion specialist situated in Asia, providing a wide range of services for listed and unlisted companies through leading expertise with global perspective and local knowledge. These services include IPO services, share registry, company secretariat, accounting & taxation, human resources & payroll, corporate trust & debt services, fund administration, and strategic business advisory.
Headquartered in Hong Kong, Tricor operates a network of 47 offices out of 21 countries, serving over 50,000 clients globally. Leveraging years of industry expertise, expert talent, and the latest technology, Tricor functions as a capacity builder for companies to facilitate every stage of their business growth from incorporation to IPO and beyond.
The Social Issue
In recent years, shareholder participation at AGMs in Hong Kong has suffered as severe typhoons, social unrest, and the current Covid-19 pandemic have disrupted accessibility to offices and restricted group gatherings. Given this situation, many companies have been looking for alternative arrangements for their contingency planning and hybrid or virtual meetings using technology to enable investors to participate online have become effective solutions.
Traditional in-person AGMs tend to be overly expensive due to the costly venue rental fees and travel costs involved. Furthermore, companies need to handle the uncertainty regarding the number of attendees as well as arbitrary constraints such as room capacity limiting physical attendance by shareholders. As a result, some shareholders could be deprived of their right to vote on important resolutions passed at AGMs or EGMs.
To address this issue, Tricor set up an e-Meeting platform called ‘SPOT’. Introducing the concept of hybrid or virtual meetings for AGMs in Hong Kong, SPOT seamlessly integrates e-voting, e-proxy, online attendance, live streaming functions, and real-time Q&A with Tricor’s voting system. By providing shareholders with the option to attend AGMs physically or virtually, SPOT helps to boost attendance through real-time collaboration while enabling greater transparency and security.
There are several benefits attached to using Tricor’s new hybrid meeting’s platform for AGMs. First and foremost, SPOT facilitates greater shareholder engagement by removing physical barriers and enabling shareholders from anywhere in the world to tune into AGMs without compromising the integrity or quality of these meetings. Investors domiciled overseas can conveniently attend without the need to travel. By incorporating an online format and electronic corporate communication into the traditional corporate AGM model, physical proxy forms and paper voting papers are no longer required. Shareholders can register online and participate via real-time voting and live Q&A.
Secondly, the hybrid platform greatly reduces administrative costs and paper waste as well as human error as voting proxy forms and registration becomes electronic. Digital AGMs have the potential to help companies achieve their ESG targets. Indeed, it is estimated that, on average, 540 tonnes of paper could be preserved each year for every 1% of companies that move from physical to digital AGMs.
Thirdly, by conducting meetings virtually, there is greater transparency and security. In fact, the platform makes AGMs accessible to all shareholders, even the smaller ones. This improves the overall governance of companies by allowing a true representation of their shareholders at annual general meetings where key decisions are made.
Furthermore, hybrid meetings ensure that AGMs can take place via remote access, even in the case of severe disruption (such as extreme weather events), subsequently removing any uncertainty on the investors’ ability to vote on important resolutions. SPOT caters to the current socio-economic climate by complying with social distancing requirements that are now commonplace in Hong Kong and elsewhere.
The Shared Value Strategy
Leveraging advanced technology, SPOT offers a unified meeting platform combining in-person and virtual attendance, ultimately creating Shared Value by enhancing shareholder engagement and reducing administrative costs as well as waste.
Taking the best of both physical and virtual formats, SPOT creates a more efficient way for shareholders to attend meetings and enables board members to better manage communications and shareholder engagement. For instance, following online registration on Tricor’s e-meeting platform, shareholders can participate in AGMs via secure personal QR codes and engage in real-time voting across multiple devices.
Questions by attendees can be managed and shared with the chairman who has his own portal view. Furthermore, the digital nature of the service mitigates any potential for human error and increases the accuracy of voting, auditing and reporting. Votes are also published immediately rather than the day after the AGM.
Source: Broadridge, Quinlan & Associates analysis
Tricor sees SPOT and hybrid meetings as the future norm. As Hong Kong develops into a more technologically integrated ‘Smart’ city, digital platforms such as SPOT will only help to improve the ease of use and efficiency of financial markets.
As shown in the figure above, AGM expenses comprise predominantly of venue and set-up expenses as well as travel and accommodation for the chairman and directors. With SPOT, listed issuers can reduce accommodation requirements at physical locations as many investors choose to attend online. E-meetings also save valuable resources by removing the need for staff to count votes manually. Based on Tricor’s recorded data, SPOT enables large corporations to significantly reduce 30-60% costs. This figure increases to 85% in cost savings if the AGM is fully virtual.
There are also significant transparency and security advantages to using SPOT and as a comprehensive service provider, Tricor decreases data sharing risks between multi-layered service vendors. ‘ProxyConnect’, a unique e-proxy solution enables shareholders to securely process proxy appointments and authorise agents to vote on their behalf.
The processing of traditional paper proxy forms can be a tedious affair and administrative burden. Paper forms require manual filling by shareholders and mailing back to issuers or its agent by post, which can be unreliable and cause delay. ProxyConnect has made this process much more efficient. Shareholders and investors can submit their proxy instructions online at their convenience. Moreover, ProxyConnect allows for split votes, which was previously not feasible. A proxy appointment or voting confirmation receipt is issued to shareholders upon successful submission, enabling a secure record of the shareholder voting history.
Accelerated by the Covid-19 pandemic, SPOT’s hybrid e-meeting platform differentiates itself from other hybrid/virtual platform providers such as Lumi, by offering an end-to-end solution that includes managing meeting notification and documentation, tailored AGM set-up, handling shareholders’ enquiries, updating entitled shares for voting according to the Register of Members maintained and acting as scrutineer for the AGM for listed companies according to each company’s listing rules and disclosures.
Source: Broadridge, Quinlan & Associates analysis
Launched in May 2020, feedback from shareholders suggests that SPOT has had a positive impact with the platform slowly gaining traction among stakeholders and clients. A survey by Tricor highlighted that shareholders welcome the option to attend meetings virtually, and find it especially useful when they leave overseas or during contingency times like Covid-19 or typhoons.
Tricor has conducted around 60 hybrid and on-site e-meetings for listed companies in 2020. The uptake has been slower than expected in the first year of launch as many companies first needed to update and approve their articles of association, which determine whether hybrid meetings are allowed, at their next AGM before they could adopt SPOT. At the time of writing in May 2021, there were at least 175 companies signed up and more were expected to join by the end of the year.
Tricor aims to approach all listed corporations in the next few years, hoping to convert half of the listed issuers in Hong Kong to their e-meeting platform. The main challenge in this regard is ongoing uncertainty regarding the legality of holding AGMs/EGMs in various companies. To gain clarity, Tricor is currently working with the HKEX (HK Exchanges and Clearing) on piloting a system demo to incorporate any feedback and to engage HKSCC (Hong Kong Securities Clearing Company) as the largest shareholder in this digital journey.
Ultimately, Tricor sees SPOT and hybrid meetings as the future norm. As Hong Kong develops into a more technologically integrated ‘Smart’ city, digital platforms such as SPOT will only help to improve the ease of use and efficiency of financial markets. Moreover, the scalable nature of their product provides Tricor with potential opportunities to apply their innovation further, for instance at press conferences. With upcoming technologies such as 5G, which will reduce latency from 15-30 seconds to just a couple of seconds, Tricor hopes that the uptake of SPOT will pick up dramatically as clients realise the benefits of hybrid e-meetings to their businesses.
|Environmental, Societal and Governance (ESG) Benefits||Business Benefits|
|Reduced Paper Waste – Approximately 540 tonnes of paper waste averted from switching to digital AGMs||Increased Shareholder Engagement – Greater engagement from shareholders keeps investors happy and able to vote on important resolutions relevant to the company’s future|
|Greater Accessibility and Stakeholder Participation – Choice of participating remotely has enabled increased numbers of shareholder attendance at AGMs||Administrative Cost Savings – Utilising the Hybrid meeting solution saves approximately 30-60% of costs associated with hosting a physical AGM for shareholders|
|Aligned with Health and Social Distancing Measures – SPOT accounts for the pressures of the pandemic, including social distancing and inability to travel to provide an alternative means of meeting shareholder needs||Alternative Revenue Stream – SPOT’s hybrid meetings solution generates added revenue on top of Tricor’s core business services|