Tokenized Shareholder Voting Rights

Eliminate the manual, multi-party reconciliation of proxy votes, share registries, and custodian banks. Smart contracts automate the entire voting lifecycle, from distributing ballots to tallying results in real-time.

• Example: A European investment fund reduced its voting administration costs by 65% by piloting a blockchain-based system, cutting out intermediary fees and manual data entry errors.
• ROI Driver: Direct cost savings on mailing, tabulation, and custodian fees, with reduced risk of costly revotes or legal challenges due to errors.

Every vote is an immutable, timestamped transaction on a permissioned ledger. This creates a single source of truth for regulators and auditors, simplifying compliance with regulations like the SEC's proxy rules and EU's Shareholder Rights Directive II.

• Real-World Application: Companies like Overstock have used blockchain voting to provide shareholders with a transparent, verifiable record, enhancing trust and streamlining annual general meeting (AGM) reporting.
• Business Value: Drastically reduces audit preparation time and provides defensible proof of fair corporate governance practices.

Move from annual, batch-processed votes to continuous governance. Tokenized rights allow for secure, ad-hoc polls on strategic initiatives, boosting shareholder participation from the typical <30% to over 70% in pilot programs.

• How it Works: Shareholders access a secure digital wallet to vote instantly from any device, receiving immediate confirmation on-chain.
• Strategic Benefit: Transforms passive investors into engaged stakeholders, providing management with real-time sentiment data for better decision-making.

Blockchain's cryptographic security eliminates risks of duplicate voting, ballot tampering, and fraudulent proxy submissions. Share ownership is cryptographically verified before a vote is cast.

• The Pain Point Solved: High-stakes activist campaigns or M&A votes are vulnerable to disputes over vote validity, leading to delays and litigation.
• The Fix: A tamper-proof ledger ensures each voting right is exercised once, providing all parties with irrefutable proof of the outcome. This reduces legal overhead and market uncertainty.

Tokenized shares can be programmed with embedded voting rights, enabling innovative capital structures. This facilitates faster, cheaper secondary trading of private company shares while maintaining clear governance records.

• Example: tZERO and other regulated platforms use security tokens to enable trading of private equity, where the blockchain automatically manages cap table updates and voting right transfers.
• ROI Insight: Attracts a new class of digital-native investors and reduces friction in private capital markets, potentially lowering the cost of capital.

Traditional proxy voting suffers from a lack of real-time visibility and complex reconciliation. Blockchain creates an immutable, timestamped ledger of every vote cast, providing a single source of truth. This eliminates disputes over vote counts and provides a perfect audit trail for regulators.

• Real Example: Broadridge's blockchain pilot with JPMorgan demonstrated a reduction in reconciliation time from days to near-instantaneous verification.

The current system involves multiple intermediaries (custodians, proxy advisors, tabulators), each adding cost and delay. Smart contracts automate the entire voting lifecycle—from distributing materials to tallying results—cutting out manual processes.

• Key Benefit: Santander's tokenized shareholder platform reported a 70% reduction in administrative costs associated with AGM management by streamlining proxy voting and dividend distribution.

Move beyond simple 'for/against' votes. Smart contracts enable conditional and delegated voting, allowing for more nuanced governance (e.g., vote-by-issue, time-bound proxies). This paves the way for real-time corporate actions and dynamic capital structures.

• Future State: Enables automated execution of shareholder-approved initiatives, like dividend distributions or share buybacks, directly through the protocol, reducing execution lag.

Operating across jurisdictions requires navigating a patchwork of regulations. A blockchain-based system can embed compliance rules directly into smart contracts, ensuring votes are only counted from eligible shareholders and automatically generating reports for different regulatory bodies.

• ROI Driver: Dramatically reduces the legal and operational overhead of cross-border compliance, mitigating risk and potential fines.

Start with a non-critical pilot (e.g., a subsidiary's AGM) to prove the technology and quantify benefits. Focus on a tangible ROI metric: reduced proxy solicitation costs, faster results reporting, or increased voter turnout. This creates a compelling business case for CIOs and CFOs to scale the solution.

• Critical Step: Partner with a regulated, enterprise-grade blockchain infrastructure provider to ensure security, scalability, and legal validity.