CSA Provides Updated Guidance on Virtual Shareholder Meetings – Corporate/Commercial Law

Canada: CSA Provides Updated Guidance on Virtual Shareholder Meetings

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Beginning in 2020, in response to the continuing challenges of the COVID-19 pandemic, many reporting issuers transitioned from in-person shareholder meetings to virtual shareholder meetings. Virtual meetings are either held entirely virtually or rely on a “hybrid” model allowing for both virtual and in-person participation.

In light of recent corporate law changes expressly permitting virtual meetings, the Canadian Securities Administrators (the “CSA“) conducted informal consultations with market participants and stakeholders. On February 25, 2022, the CSA issued guidance on holding virtual shareholder meetings that aims to help reporting issuers comply with their continuous disclosure obligations and to encourage procedures that facilitate shareholder participation.

Specifically, the CSA reminded issuers that:

  • meeting materials should provide shareholders with clear and complete information on logistical considerations, including how to access, participate in and vote at a virtual meeting;

  • they must provide full explanations of the registration, authentication and voting procedures for registered and effective shareholders;

  • they must disclose how shareholder questions will be received and handled, and any other steps that will be taken to facilitate and manage shareholder engagement; and

  • they must provide shareholders with contact information where they can get assistance with registering for, accessing or attending a virtual meeting.

The CSA have also encouraged issuers holding virtual meetings to ensure that shareholders receive a level of participation comparable to what would reasonably be expected at an in-person meeting. In particular, shareholders should have the opportunity to present motions and raise points of order during the meeting as well as to ask questions and provide comments directly to management during question and answer periods. In addition, sponsors of a shareholder proposal submitted to the meeting should be given the opportunity to speak about the proposal. The CSA have recognized that while the chair of a virtual meeting must exercise some discretion in the management of the meeting, this discretion must be exercised in a transparent manner, consistent with established practices for in-person meetings.

Finally, the CSA recommended that in the event of a disputed shareholder meeting, particular consideration be given to the advisability of holding the meeting virtually and that issuers consider establishing meeting protocols agreed upon with the dissenter before the meeting.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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