The Canadian Securities Administrators (CSA) have provided updated guidance on virtual shareholder meetings.
During the pandemic, virtual shareholder meetings became necessary due to quarantine restrictions. In the period following the pandemic, the practice has continued, with the amending of certain Canadian corporate statutes that govern the conduct of shareholder meetings and the reporting issuer’s organizing documents to permit virtual shareholder meetings and include requirements reporting issuers must meet when conducting virtual meetings.
However, the CSA has noted that some stakeholders have expressed concerns, based on their experience participating in virtual-only shareholder meetings, that these meetings present challenges for shareholders wishing to exercise their rights and express themselves to management. Other stakeholders have related difficulties accessing and participating in the virtual meetings. Based on these concerns, the regulator has issued updated guidance to assist reporting issuers in fulfilling their obligations under securities legislation and to encourage the adoption of practices that facilitate shareholder participation.
These include:
- Disclosure to shareholders on how to access and participate at virtual meetings: In order for reporting issuers to fulfill their obligations under securities legislation, it is important that reporting issuers provide clear and comprehensive disclosure in management information circulars and associated proxy-related materials with respect to the logistics for accessing, participating and voting at a virtual meeting.
- Facilitating shareholder participation at virtual meetings: For many investors, retail investors in particular, the annual meeting has traditionally represented the only opportunity for meaningful engagement with management. The ability to attend and participate in a shareholder meeting should not require anything more than a basic level of technological proficiency.
The CSA is encouraging reporting issuers to provide for a level of ease and quality of shareholder participation at a virtual meeting comparable to what a shareholder could reasonably expect if attending an in-person meeting.
This is only a summary. The complete updated guidance for virtual shareholders meetings are available for download on the website of the Canadian Securities Administrators.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.
