Canadian Securities Regulators Provide Updated Guidance on Virtual Shareholder Meetings
On February 25, 2022, the Canadian Securities Administrators (CSA) offered up new guidance on virtual shareholder meetings. Since the emergence of the COVID-19 pandemic, says the CSA, “many reporting issuers have adopted a virtual format for their shareholder meeting. These meetings are typically conducted either entirely virtually, in place of an in-person meeting, or through a hybrid format held in-person while also permitting participation via electronic means.”
CSA Staff recently engaged in informal consultations with market participants and stakeholders to better understand their experience with virtual shareholder meetings. “In light of these consultations and the still-evolving landscape for virtual shareholder meetings, we are providing the following recommendations to assist reporting issuers in fulfilling their obligations under securities legislation and encourage the adoption of practices that facilitate shareholder participation.”
The CSA points out that it is important that reporting issuers provide clear and comprehensive disclosure in management information circulars and associated proxy-related materials concerning the logistics for accessing, participating and voting at a virtual shareholder meeting. “Reporting issuers can do this by providing full explanations of the registration, authentication and voting process for both registered and beneficial shareholders.
“In order for shareholders to understand how a reporting issuer will facilitate shareholder participation at a virtual meeting, we recommend that reporting issuers provide shareholders with information concerning the procedures for how shareholder questions will be received and addressed, and how shareholder participation will otherwise be accommodated and managed at the meeting.
“We also recommend that reporting issuers provide contact information where shareholders can obtain assistance in the event of difficulties during the registration process or while accessing and attending the meeting.”
While securities regulators do not oversee the conduct of shareholder meetings, says the CSA, “we encourage reporting issuers to provide for a level of shareholder participation at a virtual meeting that is comparable to that which a shareholder could reasonably expect if they were attending an in-person meeting. This would include opportunities to make motions or raise points of order, and the ability to raise questions and provide direct feedback to management in any question-and- answer segment of the meeting. Proponents of shareholder proposals accepted to be voted on at the meeting should typically also be given the opportunity to speak to the proposal. We recognize that, similar to in-person meetings, reporting issuers and meeting Chairs will necessarily have to apply some level of discretion in fielding questions and managing the meeting. However, we recommend that the practices applied at virtual meetings be transparent and consistent with established practices for in-person meetings to promote meaningful interaction between shareholders and management.”