CSA Provides Updated Guidance on Virtual Shareholder Meetings

Virtual shareholder meetings have become ubiquitous for public companies since the onset of the COVID-19 pandemic. These meetings are typically conducted entirely virtually, in place of an in-person meeting, or through a “hybrid” format held in-person while also allowing participation through electronic means. 

Against this background, the Canadian Securities Administrators (CSA) recently published guidance on virtual shareholder meetings. The guidance follows informal consultations with market participants and stakeholders regarding their recent experience with virtual shareholder meetings, and is intended to help issuers comply with securities law and adopt practices that facilitate shareholder engagement. 

Disclosure Regarding Shareholder Access and Participation 

Issuers should provide clear and comprehensive disclosure in their proxy materials concerning the logistics required to access, participate in and vote at a virtual shareholder meeting. Meeting materials should provide complete explanations of the registration, authentication and voting processes for both registered and beneficial shareholders. 

To facilitate shareholder engagement, issuers should expressly outline how shareholder questions will be received and answered and how shareholder participation will otherwise be accommodated and arranged during the meeting. 

Issuers should also provide contact information where shareholders can obtain technical support if difficulties arise during the registration process or while accessing or participating in the meeting. 

Shareholder Participation 

The CSA encourages issuers to provide a level of shareholder engagement at virtual meetings similar to the level of engagement shareholders could reasonably expect when attending an in-person meeting. This would include opportunities for shareholders to make motions or raise points of order and pose questions or provide direct feedback to management during any question and answer segments of the meeting. Proponents of shareholder proposals to be voted on at the meeting should be given the opportunity to speak to the proposals.

The CSA recognizes that meeting chairs must exercise some level of discretion when fielding questions and managing the meeting. However, it recommends that any such practices applied at virtual meetings be consistent with established practices for in-person meetings. 

If a shareholder meeting is contested, it is recommended that issuers consult their legal advisors on the suitability of holding a virtual meeting. Issuers should also consider negotiating a meeting protocol agreement with the dissident in advance of a contested meeting. 

It is expected that virtual shareholder meetings will continue in some capacity even after the COVID-19 pandemic has ended. Issuers should ensure that virtual shareholder meetings are held in accordance with the applicable corporate statutes, constating documents and securities law. 

For further information, please contact any member of our Capital Markets Group.