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A unique approach to SME register management
By Greg Dooley, Managing Director, Computershare Investor Services
It is often assumed that small-medium enterprise (SME) companies (typically with an average register size of 2,000  securityholders) are easy to manage, do not have unique or complex requirements in the administration of their securityholder register and simply require a vanilla service delivery approach by their registrars.
In fact, the reverse is true; one size most certainly does not fit all for this segment. In many cases the challenges that the company secretaries of SMEs face are greater than those of their peers in larger organisations, given their lack of exposure to many aspects of the role, resource constraints and the complex legislative environment we operate within.
Factor in the challenges universal to all issuers regardless of their size, such as the uncertainty of the current market environment, regulatory change, developments in technology plus governance and environmental concerns, and it's easy to see why many company secretaries from SMEs are feeling a little overwhelmed.
Thankfully, the SME company secretary is not alone in facing these common issues, and with the ability to access the right mix of expertise, industry knowledge and purpose-built solutions, these challenges can be overcome.
Key challenges
Based on our experience from managing the registers for more than 900 SMEs, there are five key registry management challenges for SMEs:
Time management
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- Time management is the biggest and most common challenge for SME company secretaries in their roles today
In addition to their secretariat role, many commonly oversee functions such as investor relations, finance, legal, employee share plans, records management, board management, and corporate governance, to name but a few
100 per cent of respondents to a recent survey of Computershare's SME clients indicated that they are responsible for more than one function within their organisation (40 per cent hold three or more roles)
Higher turnover rate of SME company secretaries when compared to larger organisations. |
Meeting compliance obligations
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The perceived burden of listing rules and regulations, tight deadlines and staying in touch with changing legislation is a major concern
While larger companies generally have greater resources to dedicate to this critical function, smaller issuers can often find it difficult to manage - especially given the complexity of the legislative environment. |
Securityholder communications
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Communicating with securityholders is an ever-changing and evolving area for all issuers
Since the introduction of the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007, SMEs have generally not been able to take full advantage of the efficiency, accuracy, cost and environmental opportunities presented by this legislative change. |
Annual general meetings
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The relative cost of hosting an AGM given their low attendance figures is a major concern
Number of securityholders physically attending company meetings has fallen considerably (in 2007 fewer than one per cent of securityholders attended the AGMs of SMEs). |
Corporate actions and dividend payments
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The highly complex world of corporate actions and dividend payments can be viewed as a potential minefield for SMEs
Expectation from the board and other stakeholders for the company secretary to have deep knowledge in this area
Pressure to complete transactions successfully and with minimal cost and risk. |
Expectations of the registrar
Given the diverse challenges facing SMEs explored above, it's not surprising that their register management needs are as demanding as those of larger organisations. Consequently, many SMEs are increasingly requiring a more tailored approach to the management of their registers to suit their specific priorities and needs. With access to more personalised registry solutions and greater support, SMEs should be in a better position to increase efficiency, minimise risk, meet their compliance obligations and realise the potential benefits available across every aspect of their register management. |