Recently, two prominent Canadian companies became the first
major issuers to adopt proxy access policies.
These policies allow shareholders to nominate directors to serve
on a company's board and have their nominees featured in
management's circular and form of proxy. Typically, they afford
nomination rights to one or more shareholders (up to 20) who have
collectively held 3 per cent of shares for 3 years, and allow
shareholders to nominate up to 20 per cent of directors.
We believe that Canadian companies should generally resist proxy
access proposals.
Proxy access policies are proving popular in the United States,
with over 60 per cent of S&P 500 index companies having adopted
them. While proxy access is new to Canada, experts predict that
many more Canadian companies will soon introduce it for
shareholders. But while this may suit U.S. law and practice, it
makes less sense in Canada.
