Paul McBeth is the editor of The Bottom Line and Curious News, having worked at BusinessDesk for 15 years.
Some things in life should just work without you needing to give them a second thought.
In the investment world, one of those things is that when it comes time to cast your vote on a resolution, it should get counted. Just like our triennial vote on which flavour of bland we want pulling levers in the Beehive if you will.
For most of us, our miserly holdings don’t tend to mean much in the scheme of things, although if enough of us get riled up about something or other, the sheer weight of our voice gets heard – even if it’s just a strong vote against the re-election of a director or yet another hike in a company board’s fee pool as the poor wee dears struggle to keep up with the cost of living well.
And because we’re in uncorruptible New Zealand, we tend to think – rightly – that our systems work and our votes will be counted.
Which is where the scenes across the Tasman a couple of weeks ago spring to mind.
If you’re not a market-land tragic like your correspondent, it would have been very easy to miss the stoush going on between a couple of Aussie wagering companies.
Heads I win, tails you lose
PointsBet has been getting a little bit of attention in recent times and favoured the warm embrace of Japanese entertainment giant Mixi, but also caught the eye of Aussie rival Betr, run by industry veteran Matt Tripp.
Betr bought a 19.9% blocking stake of PointsBet, which should have scuttled Mixi’s scheme given the song and dance they’d made leading up to the meeting, but when the time came and the votes were tallied the result was shockingly in favour of a sale.
That was until Computershare reversed the call the following day, saying it had got things wrong when an issue with the system set-up meant Betr’s proxy vote cast before the meeting was revoked when the wagering firm’s representative didn’t confirm their selection when they joined the online meeting.
Apologies to all and sundry have ensued and Computershare is confident it won’t happen again, but it’s running the rule over its systems to make sure.
That’s because the registry services company understands the gravity of the situation.
It’s very easy to look at it from this side of the Tasman and chuckle at two gambling businesses – with all the accompanying egos that go with that sector – get embroiled in a highly entertaining slinging match.
One shot
But the only real lever a shareholder of a company has is their ability to cast a vote on resolutions put to a meeting, be that who’s sitting around the boardroom table to whether a major transaction should go ahead.
And given Computershare is one of the major registry businesses here, providing services to more than half of the local companies whose shares are listed on the NZX, we might want to question whether a similar sort of event could happen in New Zealand.
Especially when deep-pocketed buyers are out there looking for bargains among our mid-sized companies that might possibly be getting undervalued by the thin trading volumes on the local market.
Not so, says our market watchdog.
The Financial Markets Authority – set up 15 years ago to be a nimble and flexible regulator responsive to the needs of maintaining trust and integrity in the local market – points out Computershare isn’t licensed so doesn’t have to provide operational resilience reporting to the watchdog, meaning no need to contact the backend administrator.
Please.
For an organisation fixated on the grey areas of those things that fall in and out of its regulatory ambit, that feels like a cop-out.
Lost opportunities
Sure, the registry services provided aren’t captured by the rules of financial markets infrastructure licensing, but making sure one of the few rights investors have can be exercised at their discretion seems like one of those things that help maintain confidence our local market is working.
In fact, the general vibe is that New Zealand’s systems work better than big brother’s given we’re not as fragmented and our directors are generally more receptive to pesky questioning from their owners than some of the more unpredictable captains of industry across the Tasman.
That’s something to celebrate and would go a long way in reminding our ever-expanding army of investors that the West Island isn’t always best.
By not picking up the phone to get some assurances that New Zealand investors will get their voice heard when it comes time to vote at the next annual or special meeting, the FMA might be missing a beat to actually prove to investors they do live in Godzone.
It might very well be that Computershare understands the gravity of the situation because its clients have an alternative provider, and if they can’t prove that they have the issue under control, commercial winds could blow in another direction.
But it certainly doesn’t inspire confidence in the regulator if it just throws up its hands and says not our problem when there’s the chance to secure a little win.
Image from Carlos Gil on Unsplash.
