Major Finance Companies Complete Blockchain-Based Proxy Vote Solution
Broadridge Financial Solutions, Inc., along with J.P. Morgan, Northern Trust Corporation, and Banco Santander, has successfully completed a test trial for a blockchain-based solution for conducting global proxy voting that makes the process more transparent.
The proxy voting solution is Broadridge’s first application of blockchain technology. Proxy voting is a process for shareholders to cast a ballot at a corporate meeting without having to attend. Their solution is meant to improve transparency by leveraging blockchain’s distributed ledger technology to provide insight into, and secure, the voting process. Only authorized parties are able to access voting data, which is controlled through cryptography and executable distributed code contracts (EDCC) on Ethereum. Vijay Mayadas, Senior Vice President and Global Head of Corporate Strategy at Broadridge, said:
"This pilot demonstrates Broadridge's commitment to developing innovative technology solutions to enhance transparency in the global proxy voting process for the mutual benefit of all stakeholders, ultimately improving corporate governance for all. We believe blockchain will drive increased quality and efficiency in the voting chain by reducing complexity that exists within the process today.”
Broadridge’s pilot speaks to the many advantages blockchain tech brings to internal governance and back office processes. Even if corporations of the future never utilize virtual currency, blockchain-based solutions provide too many efficiencies to ignore. Distributed ledgers are aiming to disrupt how we maintain information, ensuring transparency and accuracy across multiple parties. One would be hard pressed to find a sector that wouldn’t benefit from an increase in trust and veracity.
Julio Faura, head of the Blockchain Lab at Banco Santander, said, “After piloting this blockchain-based platform with Broadridge, we see that proxy voting makes an interesting case where distributed ledgers and smart contracts [EDCCs] can add transparency and efficiency to financial services, to the benefit of our corporate and institutional clients.” Seeing as how the world is predominately run by corporations, and those corporations are full of shareholders who generally vote by proxy, this use-case could certainly see widespread adoption.