CSA Provides Updated Guidance on Virtual Shareholder Meetings

On February 22, 2024, the Canadian Securities Administrators (CSA) issued a news release providing updated guidance to reporting issuers regarding virtual shareholder meetings. This new guidance is a follow up to the initial guidance which the CSA released in February of 2022 at a time when many issuers had adopted virtual meeting practices due to the COVID-19 pandemic. Although most issuers have transitioned away from virtual meetings, the CSA's guidance is important for issuers that continue to offer this option (or a hybrid option, which the CSA encourages), as they prepare their management information circulars and associated proxy-related materials (together, proxy materials).

The guidance falls under two headings, each of which will be discussed in turn.

Disclosure Concerning Shareholder Access and Participation at Virtual Meetings

The CSA advises issuers that proxy materials should clearly and comprehensively communicate to shareholders in plain language how to access, participate in and vote in virtual meetings, including providing registration, authentication and voting instructions for both registered and beneficial holders. Shareholders should be made aware of virtual meeting logistics, including how shareholder participation will be accommodated (i.e., how questions can be submitted, both in advance of and during the meeting; how questions will be addressed, both during the meeting or after if there is insufficient time to address all questions during the meeting; and how voting will occur). Issuers should also provide contact information for someone at the company who can assist holders having difficulty with any part of the virtual meeting process.

Shareholder Participation at Virtual Meetings

The CSA reminds issuers of the importance of annual meetings and that it should be easy for shareholders to attend and participate in such meetings, including having straightforward registration and authentication procedures, and using an appropriate virtual platform for the meeting. The Chair should also be comfortable and familiar with the platform prior to the meeting. During virtual meetings, shareholders should have the same level of opportunity to participate as they would at an in-person meeting (e.g., making motions, raising points of order, and participating in any question-and-answer period). Additional diligence should be taken around shareholder proposals, including communicating with proponents in advance of a meeting and permitting proponents to speak to the proposals at the meeting.

Issuers should review the legislation and the company's governing documents to determine in which format the meeting should proceed. For contested shareholders meetings, issuers should consult with their legal counsel to determine whether a virtual meeting is appropriate, and if it is, what additional parameters and processes to put in place to ensure fairness.

Further Information

While the CSA's updated guidance does not provide any substantial changes to the initial guidance, it is based on feedback that the CSA received over the past two years and serves as an important reminder to issuers that care and attention must be put into planning and executing annual shareholder meetings. Regardless of whether a meeting is held virtually or in-person, the quality of interaction between shareholders and management should be reliable and issuers should be transparent and consistent with respect to what shareholders can expect.

If you would like any additional information, please contact any member of our Business Law Group.