The Capital Market Authority's decision to oblige listed companies to allow automatic voting of shareholders on the general and private assembly meetings resulted in an increase in the average number of voters in shareholders' associations during the period from the beginning of April to the end of December 2017 by 211 percent, compared to 2015 and 2016.
The number of shares held for the Shareholders 'Assembly meeting increased by 53 percent from the shareholders' meetings held during 2017 compared to 2015 and 2016.
The decision to impose automatic voting is a continuation of the Authority's efforts to regulate and develop the financial market is based on the strategy to raise the level of governance by setting appropriate procedures and initiatives that will contribute to motivating shareholders to participate effectively in meetings of public and private associations, especially minority shareholders.
According to the data, the automated voting through "Tadawulaty" system provided by the Saudi Stock Exchange (Tadawul) was used in 200 general societies during the period from 1 April to 31 December 2017.
The automated voting involves several benefits as it enhances confidence in the financial market by enabling small shareholders to participate in the decisions of the general assemblies of listed companies and allowing a class of shareholders to exercise their rights easily. In fact, this group was not previously involved in the general assemblies due to its presence in cities and regions, which are long distances from the headquarters of the associations.
One of the most important benefits to activate the automatic voting of the General Assemblies is to give sufficient time for the shareholders to view the articles of the Assemblies in full detail before they take place, which helps them to take their decisions, study them and analyze them effectively in order to contribute to raising the level of governance. This would protect the rights of shareholders and stakeholders.
The activation of the automated voting and the increase in the number of participants in the shareholders 'associations increases the efficiency of the companies' performance. It is because it motivates the listed companies to enhance the methodology of transparency with all their shareholders in all their segments and allows them to view the perceptions and proposals of the largest number of shareholders. This in turn increases the degree of supervision of the boards of directors on the listed companies to achieve the proposals of the shareholders or the decisions they make in the General Assemblies.
According to the data, the average number of voters voting automatically since the approval of the automatic vote was 84 per cent of the total number of voters compared with 16 per cent as the average number of voters voting for shareholders. The automatic voting rate was 31% of the number of shares held for shareholders' meetings during the same period.
In this context, the Authority emphasized the importance of shareholder's participation in meetings of shareholders' associations, either through automated voting or through the actual attendance of the meeting's headquarters in order to vote, debate and ask questions that to ensure all parties exercise their rights under the relevant laws and regulations.
Moreover, Mr. Badr Al-Ghanim, Undersecretary of the Capital Market Authority for Legal Affairs and Enforcement, stressed that the Authority is working on continuous development and investment of resources and technology in the best way to improve the performance, transparency and governance in the Saudi financial market and to protect its investors against practices that violate the financial market regulations and executive regulations, as well as providing excellent services to individuals and their clients, and facilitate the completion of their transactions and requests.
He pointed to the most prominent regulations and procedures issued by the Authority in recent years that aimed at developing the market and increasing the levels of transparency, disclosure and governance to protect the transactions of the market and its customers from violating practices that harm investors and customers, including the development of the Investor Protection Department to take over the tasks of receiving investors complaints and its implementing regulations.
He explained that this Department aims to develop complaints and communications procedures to increase the level of speed and efficiency in handling complaints and communications and ending them by regular means. In an electronic manner, applicants can submit complaints to the Authority to complete their communications easily and to complete all procedures automatically between the Authority and all investors in the financial market, and the listed companies in the market.
This step is in line with the Authority's efforts in the financial leadership program to enhance confidence in the financial market and protect investors from improper practices, maintain market integrity, develop the methods of agencies and entities involved in securities trading and develop procedures to reduce risks associated with securities transactions.
