Nasdaq tech community spotlight
Strate CEO André Nortjé and Beverley Furman, Head of Operations and Change talk about their recent joint partnership with Nasdaq Tech and collaborating with the South African financial market ecosystem that led to the creation of a revolutionary new electronic voting platform for issuers and shareholders.
Q: Can you tell us a bit about your organization and how you work with technology innovation?
André Nortjé: Strate is one of South Africa’s central securities depositories; the way in which we view innovation is not limited to technology, but considers the innovation value chain, which is a combination of how we deliberate about business models, operating models, and market-adoption models. Strate as a central securities depository is entrusted to keep the electronic records of ownership and settle trades and, as such, we need to connect the ecosystem. When we innovate, we look at the value chain from an end-to-end perspective to identify problems that we can solve either using technology, a business model or an operating model.
Q: You are one of the first major organizations to use this type of blockchain-based e-Voting solution. How did you arrive at the decision to implement this?
André Nortjé: We decided to use blockchain technology to solve the problem of voting in South Africa. Blockchain as a concept is quite difficult to implement in a complicated ecosystems. The e-Voting solution was necessary to solve the problem where the market had a fragmented paper-based environment. The solution was a fairly low-risk implementation therefore we decided to use blockchain technology that was aligned to what we have being trying to achieve, which was a single digital solution for the voting activity. We found a partner like Nasdaq to join us in co-developing what we believe is a world-class solution for electronic voting.
Q: What benefits does this bring for the shareholders in South Africa and how has the new service been received by the issuer community in terms of corporate governance and investor transparency?
Beverley Furman: In moving to electronic voting, and using the application that we’ve co-developed with Nasdaq, there has been the enablement of two main benefits, or themes. One is simplicity and efficiency. The other one is shareholder activism and the voice of the shareholder being heard by the issuer right up until the close of resolutions. Asset managers who have been exposed to the demo of this solution have shown huge excitement because this application allows them to cast their votes and fulfil their fiduciary duties and their corporate and social responsibility. They can cast their votes on the application either for or against or abstaining, and they are representing their clients who are the ultimate beneficial owners of the investments. The solution also allows them to insert commentary. So, for the first time, if they are abstaining from a vote or voting against, they can include commentary and the issuer can take note of why an asset manager is voting in a certain way. That is proving to be of significant value in the asset managers getting their voice heard by the companies that they’re investing in.
Q: Lessons learned that you would like to share with others that are looking to implement a similar solution?
André Nortjé: Change is always difficult, especially if you have to change the ecosystem and the change that is needed from voters, a transfer agency and custodians. The important lesson that we’ve learned through the process is to think carefully about the value proposition to each of the various participants in the value chain of e-voting. Your product should be priced in a way that supports the value that is created for each of the participants. Another big lesson we have learned is that you need to involve the market in the conversations about the change. I think that’s been the success story for us in South Africa, that this solution was co-developed with our technology partner, Nasdaq, as well as the market.