The CSA also issued this past year renewed guidance on virtual shareholder meetings, emphasising that “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.” The CSA is also encouraging issuers to “provide for an ease, level and quality 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.” Against this backdrop of scrutiny, many 2024 proposals that called for the reinstatement of in-person attendance at meetings (including through a hybrid of in-person and online participation) received significant shareholder support, including from prominent Canadian asset management firms. Nonetheless, we expect that some issuers will continue to utilize virtual-only shareholder meetings given the myriad advantages offered in terms of cost, convenience, security and, when conducted appropriately, the opportunities for increased shareholder participation. Issuers offering a hybrid or virtual-only meeting format should do so with reference to the CSA’s guidance and the concerns of the governance community in mind. In particular, we highlight that issuers should facilitate virtual participation at shareholder meetings through plain language explanations of how registered and beneficial shareholders can participate in the meeting; simplifying the registration and authentication process; adopting an effective technological platform for the virtual component of the meeting; ensuring the chair and others conducting the meeting are well-versed in the technology; and, perhaps most importantly, ensuring the virtual platform allows for robust shareholder participation. Specifically, the virtual meeting platform should provide shareholders with the ability to make motions and raise points of order and allow shareholders to ask questions and engage with management. We expect the movement against virtual-only meetings and restricted-participation platforms to continue in 2025, in particular where such mechanisms are adopted by larger, TSX-listed issuers who do not implement adequate technology and procedures to ensure adequate shareholder participation.
CLIMATE-RELATED SHAREHOLDER PROPOSALS
Climate-related proposals in the 2024 proxy season included “Say on Climate” proposals, proposals requesting expanded greenhouse gas emissions disclosure (in particular with respect to scope 3 emissions) and proposals calling for detailed disclosure on energy transition and decarbonisation plans. Issuers targeted included banks and other financial institutions and companies in the energy sector. This is perhaps the hardest trend to predict for 2025. On the one hand, in the United States there is significant political pushback against so-called “woke capitalism,” and asset managers have responded by pulling back support for climate-related and other ESG shareholder proposals. This has affected the Canadian landscape as well – note for instance the recent withdrawal of the last Canadian bank from the Net-Zero Banking Alliance, following the retreat of American counterparts. On the other hand, high- profile natural disasters such as the Jasper wildfire and the more recent Los Angeles fires underscore that climate-related disasters are not going away, and issuers must address climate change as part of their larger risk management programs.
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Governance Insights 2025
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