Canadian Securities Administrators Provide Guidance on Virtual Shareholder Meetings

Published on: March 2024 | What's Trending

Hybrid meeting - people sitting around a table watching their colleagues join in on a screen

Following COVID-19, several corporate statutes in Canada were amended to expressly permit virtual shareholder meetings while providing specific requirements for reporting issuers (i.e. public companies) when conducting such meetings. After providing initial guidance on virtual shareholder meetings in February of 2022, the Canadian Securities Administrators (“CSA”) have now provided additional guidance of which reporting issuers should note.

Stakeholders’ own experiences participating in virtual-only meetings have highlighted some of the concerns with virtual meetings. A notable problem is that virtual meetings make it difficult for shareholders to express themselves to management, being more difficult to access and participate in. This is a particular problem, as securities law is aimed at, among other things, giving shareholders the ability to exercise their rights at shareholders meetings. Based on this, the CSA has provided recommendations to reporting issuers when conducting virtual shareholders meetings.

Clear and Comprehensive Disclosure Regarding Access

One point highlighted by the CSA is that reporting issuers must provide clear and comprehensive disclosure in management information circulars and the related proxy materials regarding accessing, participating, and voting at virtual meetings. Reporting issuers can do this by drafting their documents in plain language, and providing explanations on the following:

  • How both beneficial and registered shareholders may register, authenticate, and vote, and how they may obtain assistance should issues arise during such processes; and
  • How participation by the shareholders will be accommodated and managed. This may include information on procedures for shareholders to ask questions, either during or before the meeting, how such questions will be addressed during the meeting, and instructions for voting at the meeting.

Facilitate Participation

The other guidance provided by CSA is to facilitate participation at virtual meetings, while noting that participation virtually should be comparable to an in-person meeting. The CSA provided the following suggestions to achieve this:

  • Simplify the registration and authentication procedure;
  • Provide shareholders with opportunities to make motions and raise points of order;
  • Ensure shareholders have the ability to ask questions and provide feedback to management;
  • Advise where shareholder proposals will be presented and voted on during the meeting, coordinate them in advance, and ensure each proposal is given a reasonable opportunity to be heard and respond to any questions;
  • Ensure that the virtual platform used for the meeting allows the maximum extent of participation possible; and
  • Ensure that the Chair of the meeting has appropriate knowledge and experience with the platform hosting the virtual meeting.

The CSA encourages all reporting issuers to refer to their governing corporate legislation and constating documents, and to hold hybrid meetings where possible. They have also noted that they continue to monitor virtual shareholder meetings, and may issue additional guidance in the future, particularly with regard to proxy materials.

Should you have any questions about virtual shareholders meetings and how they might impact you, a member of our business law group would be happy to discuss.