The Canadian Securities Administrators (CSA) recently updated their guidance for companies on hosting virtual shareholder meetings.
This move comes after the initial recommendations released in February 2022, reflecting the evolving nature of corporate gatherings in the digital age, especially in the post-COVID-19 context. With corporate statutes in Canada now expressly allowing for such digital assemblies, the CSA's guidance aims to ensure that these virtual meetings are conducted in a manner that upholds shareholders' rights and facilitates their participation. This is crucial, as feedback from stakeholders suggests that virtual-only meetings can sometimes hinder shareholders' abilities to engage effectively with management and participate fully in the meeting process.
To address these concerns, the CSA has outlined several key areas where reporting issuers can improve their practices. Firstly, there is a strong emphasis on providing clear, comprehensive disclosure in management information circulars about how shareholders can access, participate in, and vote at these virtual meetings. This includes detailed instructions on the registration, authentication, and voting process, as well as how shareholders can ask questions or raise issues both before and during the meeting.
Another significant focus is on facilitating shareholder participation to ensure it mirrors the experience of an in-person meeting as closely as possible. Suggestions include simplifying registration and authentication procedures, allowing for motions or points of order from shareholders, and ensuring direct communication with management during Q&A sessions. Moreover, the CSA advises that virtual meeting platforms should support full shareholder participation and that meeting chairs be well-versed in the technology being used.
The guidance also encourages reporting issuers to consider hybrid meeting formats that offer both in-person and virtual participation options, aligning with best practices for inclusive shareholder engagement. This recommendation underscores the importance of accessibility and engagement in the shareholder meeting process, reflecting a commitment to upholding shareholders' rights in the digital age.
The CSA will continue to monitor the practice of virtual shareholder meetings closely, with an eye on proxy-related disclosures in the upcoming season, and may issue further updates or guidance as necessary.