Broadridge using blockchain to address Shareholder Rights Directive

In 2017 the European Union published an updated version of the Shareholder Rights Directive. Although this is an EU initiative, it will have a far broader remit because it will impact investors in EU companies as well as intermediaries elsewhere. A recent survey by Hermes found that only 3% of respondents currently meet the Directive requirements. Today Broadridge, the company that’s known for investor communications and proxy voting, announced it is using blockchain to address some of the requirements.

EU Shareholder Rights Directive

The European Commission (EC) stated that the financial crisis was the trigger for the new legislation. It went a step further saying “many shortcomings in corporate governance of listed companies contributed to the financial crisis.” It went on to note a lack of engagement and control by shareholders, which affects decision making. Additionally, it’s complicated and costly for shareholders to exercise their rights. That’s mostly because of the reliance on custodians who have control over the shares.

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