Voting levels at Asian companies are cause for concern concludes the Asian Corporate Governance Association (ACGA). Talking to the Financial Times earlier this week, Jamie Allen, secretary general of ACGA has said that lack of investor  involvement means that voting levels are running at about 30% some 20% shy of the levels of voting in the UK or US.

Allen attributes two issues to the lack of involvement: voting by show of hands and the dominance of major shareholders. The presence of a large number of family-controlled companies in Asia appears to have quashed any interest in pushing shareholders' views at shareholder meetings.

But this reluctance could be based on a misconception.  As Manifest's Asian proxy research shows, where there is a major transaction on the agenda, the major shareholder is barred from voting. As Allen says: "funds are giving away the opportunity to influence the outcome.”  This could mean that a quoted company being taken private at a significant discount to the market value.

The list of barriers to voting in Asia will sound familiar to anyone who has been voting across borders in continental Europe:

• late agendas;  
• agendas unclear or bundled resolutions;
• insufficient information to make an informed judgement;
• no vote lodgement confirmation;
• absence of voting results; and
• voting by show of hands rather than by poll.

Fortunately, hope is on the horizon for cross-border European voting in the form of the Shareholder Rights Directive but it's not yet clear how those reforms could reach a wider market. Given the determination of the US, UK and European regulators to up the ante on shareholder dialogue and engagement, market forces may yet prevail.