Virtual Shareholders’ Meetings on Significant or Contentious Matters The above considerations are relevant for all virtual AGMs. However, additional factors come into play if an issuer intends to hold a virtual meeting at which significant or contentious matters will be considered and voted upon by shareholders. For these purposes, significant or contentious matters include mergers and going-private transactions, related party transactions, substantial share issuances, contested director elections, shareholder proposals and material amendments to articles and bylaws. They typically do not include relatively routine business, such as the approval of stock option plans or advisory votes on executive compensation. The 2020 proxy season demonstrated that it is possible, albeit more challenging, for issuers to hold virtual-only meetings for significant or contentious matters. Twenty-eight issuers (8.31%) listed on the TSX Composite and SmallCap indices held virtual-only meetings at which such matters (broken out in Figure 5-2) were put to shareholders. However, almost all of these meetings were held in the midst of the COVID-19 pandemic. Accordingly, issuers should be wary about relying on these meetings as precedents in the absence of similarly exceptional circumstances. Even in extenuating circumstances, it may not be feasible or advisable to hold a virtual meeting (especially a virtual-only meeting) to consider significant or contentious matters, whether due to technological limitations, an unwillingness of virtual meeting service providers to accept liability in the event of a malfunction or an elevated risk of litigation or regulatory intervention.
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Governance Insights 2020
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