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1st Floor Lona House
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Bo Kaap, Cape Town, 8001

Jaime-Lee Gardner
072 171 1979

Louise Martin
073 335 4084

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Digital technology heralds fuss-free decision making in residential communities

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Digital technology heralds fuss-free decision making in residential communities

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6 min read

Is this the beginning of the end of AGMs as we know them?

Residential estates and sectional title complexes are managed according to rules, regulations and decisions based on the preference of the majority of owners, determined in the AGM. But think of the time, energy and expense that goes into this process. In many instances, supporting documents, usually a large number of pages, are printed and hand delivered or posted to owners. In large communities, this results in thousands of pages at a huge cost to the community (not to even mention the trees!). Then there is the process of proxies, where owners need to nominate other owners to vote on their behalf on the day of the meeting if they are unable to physically attend.

Apart from the administration in managing these proxies, many owners just don’t bother attending and therefore don’t participate in the voting process. At the meeting, each owner needs to register to confirm their attendance and to ensure that the necessary number of eligible owners are present in order to legally continue with the meeting. This is called a quorum and usually results in the meeting starting hours later than planned. When the actual voting starts, it is done mostly by either a show of hands, with voting number cards in some instances, or closed ballots. In the case of a show of hands, the officials have the almost impossible task of accurately counting the hands and taking the number of voting cards into consideration. In the case of a closed ballot, usually the auditors are asked to count the votes while members take a break and await the outcome. This is generally a long and expensive process.

The good news is that the way AGMs and SGMs (as well as any decision making in communities, for that matter) are run can now change forever. Imagine a world where motions and supporting documents are shared electronically to members in sufficient time to allow adequate interrogation and consultation in the comfort of the homeowners’ own space. Imagine a fully inclusive decision-making process where all members have the opportunity to cast their vote, regardless of whether or not they can physically attend the meeting, making the need for nominating a proxy obsolete.

Imagine arriving at the meeting without the need to register and, when it is time to vote, simply casting your vote on your mobile phone. And imagine the results of the votes not only being available in real time, but being 100 percent accurate, auditable and incorruptible. Imagine not actually having to physically attend meetings during the course of the year to make decisions in the community, but instead making decisions throughout the year from the comfort of wherever the homeowner is at that point in time. Finally, imagine the community owning an incorruptible and auditable time-stamped record of every such motion, voting process and result.


Electronic voting enabled by the GLOPortal CMS (Community Management System)

GLOVent Solutions offers an exclusive and unique electronic voting module now available in the GLOPortal Community Management System (CMS). The GLOPortal voting module provides an electronic interface for community-appointed administrators to create and share the details of a motion or vote with members.

Members then have the opportunity to cast their vote either through their smartphone (using the GLOPortal member mobile application) or via a web interface using the GLOPortal member portal. Supporting document uploads, and a discussion forum unique to each vote, allows members to voice their opinion and discuss the matter just as they would in a traditional member meeting, but without the peer pressures normally involved.

The Companies Act 2008 recognises that corporate entities operate in a digital age and has, to a limited extent, made provisions for technological changes, including for information to be stored digitally, notices for shareholder meetings to be sent electronically, and meetings to take place on an electronic platform. The GLOPortal voting module accommodates and makes provision for all of the necessary governance controls to ensure that any vote taken on any issue, at any forum, will be fully compliant, and fully representative of the participating community.

This is made possible by, amongst others, features such as the selecting of participants or eligible voters for each motion, the provision of a detailed description of the motion with optional attachments as supporting documents, the setting up of the vote opening date and time, which will typically allow for the required notice period, and the setting of the vote closing date and time. Members will only be able to vote between the opening and closing times, and the setting of the required minimum participation, or number of votes cast before the vote is deemed valid (the quorum), can also be established.

A unique feature of the GLOPortal voting module is the technology used to store the voting data. A major concern with electronic voting is the authenticity of the vote and its outcome. The GLOPortal voting module uses blockchain technology to store all voting data, which by design makes it uneditable, incorruptible and fully auditable.




Blockchain technology — a distributed, incorruptible database

The blockchain is a database technology or a software platform designed for the management of digital assets by effectively creating a distributed ledger. This ledger is decentralised in that an identical version exists on every device, forming part of the blockchain network. The ledger records every transaction (known as blocks), and each block is linked to the previous block. The records are immutable and, once recorded, data cannot be amended retrospectively. It therefore allows for the permanent and immutable transparent recording of data, specifically transactions. Blockchain is referred to by some as the Internet of value.

Blockchain can be used to store and exchange any number of things that have value. It is better known for storing and managing digital or crypto currency transactions and ownership, like Bitcoin, but can also be used to store the outcome of information transactions, such as the proposing by management of a motion and the recording of an individual’s vote as applied by the GLOPortal voting module.

Voting with blockchain technology means each member or shareholder is issued with a digital asset, which is a digitally created mechanism that enables the member’s voting rights to be signified digitally. Members are then issued with weighted tokens to cast votes on resolutions on which they have voting rights.

Although new, voting using blockchain technology is gaining significant traction internationally. Nasdaq, an exchange operator in New York, conducted a blockchain e-voting trial in Estonia and declared it a success. The trial results showed that blockchain voting reduced the complexity and cost of voting, increased the speed of the voting process and boosted overall shareholder participation. The European Parliamentary Research Service also recently published a report highlighting the potential revolutionary effect of blockchain on voting, not only at shareholder meetings, but in national elections.

GLOVent Solutions has already created this blockchain database for the South African residential community industry and has provided it at no charge. This means that the industry, not GLOVent or any other commercial entity, will own all of the data stored on the industry blockchain.

The GLOPortal voting module is an application developed by GLOVent Solutions to allow individual communities, or industry groupings, to conduct a vote and store the data on the industry blockchain. The module is separate from the blockchain, and the resulting blockchain data belongs to the industry, not to GLOVent. Each approved blockchain administrator appointed by the individual community or industry body will control who can read or write to the industry blockchain, as well as each information transaction. The records and results of every vote in this case are stored as a unique transaction between the participants, and are accessible only to individuals or entities authorised by the industry administrators.

It signals a whole new era in the administration and management of residential communities, removing the obstacles and expense that defined the process in the past.



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