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New research from the University of Wollongong suggests that using blockchain technology to allow e-voting at annual general meetings could increase overall company value.
The research, by Professor Alex Frino, Deputy Vice Chancellor at the University of Wollongong, and his research team, suggests that introducing e-voting via blockchain would increase attendance and participation by shareholders at AGMs, which in turn would increase company value.
“Participation at AGMs is a recognised problem globally, and five exchanges[1] have announced blockchain projects to try to remedy this,” Prof. Frino said. “In Australia, the ASX have also said that electronic AGMs will be enabled by blockchain, however no actual research existed to suggest whether this might work or not.”
The research, based on ASX200 companies, shows that over 37% of shareholders don’t attend, or vote at, AGMs. Over 60% of votes are made by proxy, with less than 2% of shareholders turning up in person to AGMs. The research found a significant negative correlation between non-attendance and non-voting and company market value. Researchers used this correlation to estimate how increased attendance and voting could positively influence market value.
“We found that by increasing voter participation by 10%, companies could expect an uplift of approximately 6% in their value,” said Prof. Frino. “For the top 25 companies on the ASX this would translate to an additional $63.5 billion in value. Theoretically, if the full ASX200 could increase shareholder participation by 10%, the Australian market would gain an additional $998 billion.”
