E Vote in AGM

The Annual General Meeting (AGM) is an important event for a company. It is mandatory, as per SEBI, and must be held within five months after a financial year ends. An AGM is where the company’s financials are presented, along with major decisions taken on appointments and reappointments. This includes appointments for the company's senior leadership, like directors. Decisions on the salaries for these positions will also be made during this meeting. Perhaps the most prominent aspect of an AGM is that it is open for all of the company shareholders to join as they not only are entitled to participate but also cast their votes for the big business decisions.

Since the pandemic, the AGM voting process has shifted online. This allows the shareholders to participate from anywhere virtually and still be a part of the decision-making process. Even the process of e-voting for shares is online, with shareholders able to cast their vote virtually.

Even though e-voting for shares is a recent development, it has become popular among investors as a convenient alternative. In this article, we will discuss what e-voting for shares is and how investors can cast electronic votes. We will also detail its various steps and elaborate on the significance of e-voting for shares today.

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Typically, shareholders tend to stay out of a company's corporate decisions and operations. Attending a firm's AGM also requires effort and time. However, each shareholder still has the right to participate. Towards this, the Companies Act of 2013 has also mandated that all companies offer facilities for e-voting for shares.

Essentially, e-voting for shares is a virtual framework that empowers all shareholders to electronically cast their votes for various decisions in a company’s annual general meeting. With the vote being digital, shareholders have the option to participate from any location and at their preferred time. Earlier, the postal ballot system was in use, where each shareholder had to be individually notified, and votes had to be sought.

E-voting for shares is an important step for investors to save their effort and time by participating in companies' decisions virtually. Typically, the process for e-voting is opened before the AGM, and all the votes are cast at least three days before the meeting commences. In addition, the voting has to stay open for at least a day and can go on for three days at most.

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Let us understand the process of e-voting for shares with a practical example. Suppose you have invested in a company ‘MNO’. This company is supposed to have its AGM on 24th June after the financial year ends in March. Every company shareholder will be notified of this through email and will be informed of the e-voting window. The voting would probably commence around the 20th of June and go on until the 23rd. After this, the window will be closed, and shareholders can no longer cast electronic votes. The voting rights provided to all shareholders are in proportion to their shareholding on a given date.

Now that the meaning and working of e-vote is clear, let us discuss the steps that an investor must take to cast their e-vote. These are:

• Step 1: First, visit CDSL/NSDL’s e-voting portal and log in with your credentials. You must input your ID, password, and a verification code received on your registered contact number or email. The exact format of the user ID and password may vary slightly depending on the depository where your Demat account and shares are held.
• Step 2: This only applies to investors holding physical company shares. Their user ID is the electronic voting even number combined with the registered folio number. You can simply log in if you already have a CDSL/NSDL account.
• Step 3: After logging in, you will be able to access a cumulative listing of active e-votes. You can choose where you want to cast your vote and proceed with your selection.

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One of the trends observed in the business world in recent years is that shareholders of a company are becoming increasingly involved in the internal operations of the company. Shareholders ensure their voices are heard by taking a stand against unfair decisions and encouraging decisions they believe will be in the company’s best interest. This is enabled and made possible by voting.

This means that e-voting for shares is a useful tool in a shareholder’s arsenal to keep a check on companies in terms of operations, leadership, and governance.

For shareholders who are invested and interested in a company’s functioning, voting in an AGM is a solid way to make your e-voting for shares count.

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Conclusion

E-voting for shares represents a significant advancement in shareholder participation, making it more accessible and convenient. By allowing shareholders to cast their votes electronically from any location, this system not only saves time and effort but also ensures that shareholder voices are heard in important corporate decisions.