Investors: so far, so close

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20 September 2018 News Headline Hits: 645


The Chilean securities market requires depth and participation as one of the ingredients for its growth. We need more people to understand and trust the companies and institutions that are actors in the market, including our authorities and regulatory agencies. In this context, one relevant element for investors is a solid corporate governance, that each one has confidence in the decisions being taken in each entity to pursue their growth, comply with their strategic plan and the good practices of the respective industry. Also, each investor should be able to access information on the company, as shareholder thereof. Shareholders meeting: a long way to go We still have a long way to go. Depósito Central de Valores analyzed certain companies included in the Selective Share Price Index (IPSA), which maintain their registries with DCV Registros, a subsidiary of DCV. We analyzed 25 companies (out of the 40 that make up the Index) which represent about 52.18% of the aforementioned Index. According to the study, only 6.4% of shareholders personally attended the 2018 ordinary shareholders meetings. That is, on average, 47 shareholders or their representatives attended the meetings, out of a total of 3,341 individuals or legal entities (which includes brokerage firms, international custodian banks, among other institutions). Only 2 companies reached a participation rate greater than 20%, while seven firms reached a figure below 1%. By sector, the highest attendance was in construction and real estate (16.9%), and retail (10.5%) areas. Even though the required quorums were met, the low attendance of shareholders is not a good indicator. In fact, different sectors have said that investors, whether local or foreign, should rely on mechanisms that permit them to attend shareholders meetings (even remotely). This results in concern about these numbers because surveys such as “La Voz del Mercado” (prepared by the Stock Exchange and EY), have indicated that one of the things that investors value the most is the access to information and being able to participate in the company’s decision making. The good news is that some companies have already implemented mechanisms allowing its investors to attend shareholders meetings via streaming, which would allow achieving higher attendance. Also, there are other companies analyzing the feasibility of implementing remote e-voting. Increasingly, shareholders meetings are becoming an important place for the definition and announcements on the companies’ investment plans, which means that all shareholders, especially foreigners, should exercise their right to speak and vote at those meetings. Undoubtedly, this is an opportunity to improve the corporate governance of companies whose shares are traded in the Chilean securities market. DCV News

head javier jara septiembre 2018 ing

The Chilean securities market requires depth and participation as one of the ingredients for its growth. We need more people to understand and trust the companies and institutions that are actors in the market, including our authorities and regulatory agencies. In this context, one relevant element for investors is a solid corporate governance, that each one has confidence in the decisions being taken in each entity to pursue their growth, comply with their strategic plan and the good practices of the respective industry. Also, each investor should be able to access information on the company, as shareholder thereof.

Shareholders meeting: a long way to go

We still have a long way to go. Depósito Central de Valores analyzed certain companies included in the Selective Share Price Index (IPSA), which maintain their registries with DCV Registros, a subsidiary of DCV. We analyzed 25 companies (out of the 40 that make up the Index) which represent about 52.18% of the aforementioned Index.

According to the study, only 6.4% of shareholders personally attended the 2018 ordinary shareholders meetings. That is, on average, 47 shareholders or their representatives attended the meetings, out of a total of 3,341 individuals or legal entities (which includes brokerage firms, international custodian banks, among other institutions). Only 2 companies reached a participation rate greater than 20%, while seven firms reached a figure below 1%. By sector, the highest attendance was in construction and real estate (16.9%), and retail (10.5%) areas.

gc javierr ing

Even though the required quorums were met, the low attendance of shareholders is not a good indicator. In fact, different sectors have said that investors, whether local or foreign, should rely on mechanisms that permit them to attend shareholders meetings (even remotely).

This results in concern about these numbers because surveys such as “La Voz del Mercado” (prepared by the Stock Exchange and EY), have indicated that one of the things that investors value the most is the access to information and being able to participate in the company’s decision making. The good news is that some companies have already implemented mechanisms allowing its investors to attend shareholders meetings via streaming, which would allow achieving higher attendance. Also, there are other companies analyzing the feasibility of implementing remote e-voting.

Increasingly, shareholders meetings are becoming an important place for the definition and announcements on the companies’ investment plans, which means that all shareholders, especially foreigners, should exercise their right to speak and vote at those meetings. Undoubtedly, this is an opportunity to improve the corporate governance of companies whose shares are traded in the Chilean securities market.

DCV News