CSA Provides Updated Guidance On Virtual Shareholder Meetings

On February 22, 2024, the Canadian Securities Administrators (CSA) provided updated guidance on virtual shareholder meetings.

These updates will assist reporting issuers in fulfilling their disclosure obligations and encourage adoption of practices that facilitate shareholder participation.

Shareholder meetings are primarily governed by corporate law and a company's constating documents. Following the COVID-19 pandemic, certain corporate statutes in Canada were amended to expressly permit virtual shareholder meetings. The CSA provided initial guidance on virtual meetings in February 2022. However, since then, the CSA has noted that stakeholders have raised concerns that virtual-only meetings present challenges for shareholders wishing to exercise their rights and express themselves to management, as well as difficulties accessing and participating in virtual meetings.

The updated guidance from the CSA focusses on two areas: (a)disclosure on how to access and participate in virtual meetings, and (b)facilitating shareholder participation.

Access and participation

The guidance outlines that proxy-related materials should provide plain language explanations of how both registered and non-registered shareholders can participate, including the registration, authentication and voting process, as well as how to get assistance in the event of difficulties. The guidance also outlines the need for disclosure on how participation will be accommodated and managed during the meeting, including (i)information on how shareholders can send or ask questions in advance of or during the meeting; (ii)how questions will be addressed during or after the meeting; and (iii)instructions for voting at the meeting.

Facilitating participation

The CSA encourages issuers to ensure that shareholder participation at a virtual meeting is comparable to what a shareholder could reasonably expect if they were attending an in-person meeting, asserting that the "ability to attend and participate in a shareholder meeting should not require anything more than a basic level of technological proficiency."

Specifically, the CSA recommends that issuers facilitate participation in the following ways:

• simplifying registration and authentication procedures;
• providing shareholders with opportunities to make motions or raise points of order;
• ensuring shareholders can raise questions and provide direct feedback to management in any question-and-answer segment of the meeting;
• indicating where shareholder proposals will be presented and voted on at the meeting, coordinating with proponents of those proposals in advance of the meeting, and ensuring proponents are given a reasonable opportunity to speak to the proposal and respond to any questions that arise from the proposal;
• ensuring any virtual platform used has sufficient functionality to permit shareholder participation to the fullest extent possible; and
• ensuring the chair of the meeting is experienced and knowledgeable in the technological platform being used for the virtual meeting.

Finally, the CSA recommends that issuers consult and follow accepted best practices relating to the conduct of virtual shareholder meetings, which includes considering holding hybrid meetings to allow both in-person and virtual participation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.