Governance Insights 2026 A Preview of 2026: 10 Legal Updates GCs, Boards and Investors Need to Know
Despite the significant activity levels in Canada in 2025, only four campaigns went the distance to a shareholder vote last year, with settlements continuing to dominate outcomes. Large-cap issuers continue to drive this settlement trend, with parties favouring earlier resolution in a bid to avoid prolonged uncertainty and control costs. In 2025, we also witnessed a significant reshaping of the shareholder engagement landscape, with Glass Lewis’s shift away from benchmark voting; President Trump’s executive order targeting the influence of proxy advisors; JPMorgan’s breaking ties with proxy advisors in favour of in-house AI-assisted voting; and Exxon Mobil’s adoption of an automatic retail voting program. Although these developments are, for now, largely limited to the U.S. market, they will create challenges for both boards and activists, suggesting that both should revisit their engagement strategies going forward. As for 2026, if markets keep shaking off continued geopolitical and economic uncertainty, the resurgence of M&A activity that we saw in the second half of 2025 may encourage a greater number of M&A-focused campaigns in 2026. Early 2026, however, has already witnessed a number of headline- grabbing geopolitical developments. If investors and dealmakers pull back, then all bets are off as to what 2026 may hold for activism in Canada. Regardless, issuers of all sizes would be well-advised to proactively address vulnerabilities and strengthen their relationships with their key shareholders and other stakeholders. For a more detailed discussion of Canadian activism in 2025 and what to expect in 2026, stay tuned for Davies’ upcoming Governance Insights article. 8. T he Waning Influence of Proxy Advisors? The proxy advisory landscape is undergoing a tectonic shift. These changes will affect the services being offered by proxy advisors and, in the long run, could reduce their influence over the institutional shareholder vote. In the U.S., the historic influence that proxy advisors have had over the DEI and ESG policies of public corporations is being aggressively challenged at the state and federal levels. Most notably, Texas enacted Senate Bill 2337, which imposes significant disclosure obligations on proxy advisors (a temporary injunction has paused enforcement with a trial on the merits to follow in February 2026), and this past December the President issued an Executive Order calling on federal regulators (including the U.S. Securities and Exchange Commission) to increase oversight over proxy advisors and to assess their current practices under existing law. In Canada, we currently expect little in the way of legal or regulatory changes targeting proxy advisors (other than changes that may be required by, or are directly in response to, changing legal obligations in the U.S.).
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Davies | dwpv.com
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