Canadian 2019 proxy season: what lies ahead

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Nov 28, 2018

In November 2018, Norton Rose Fulbright published a summary of their recommendations when preparing for the upcoming proxy season.

Their recommendations include:

  • ESG: Take the lead on ESG, especially on environmental disclosure.
  • Diversity: When reviewing or adopting a diversity policy, keep in mind the definition of “designated group” and consider adopting a specific target relating to gender diversity. Review skill matrices and lists of potential board candidates.
  • Board renewal: Do not let your board become stale. Be proactive in reviewing its composition.
  • Directors: Balance the benefits of having well-known executives and busy corporate directors on the board versus the risk of lower engagement due to other commitments. Take proxy advisors’ voting guidelines into account when making nominations.
  • Proxy access: Stay abreast of developments regarding director appointments, including proxy access.
  • Directors’ elections: Review articles and by-laws, as well as majority voting policies. Consider vulnerability of directors.
  • Say-on-pay: Take your say-on-pay results seriously, have a strategy in place in cases of low approval rates and be ready to implement it when required.
  • Executive compensation: Do not underestimate shareholders’ interest in compensation.
  • Non-GAAP financial measures: Re-evaluate disclosure practices on non-GAAP financial measures in light of the proposed National Instrument and stay tuned for its entry into force.
  • Information to shareholders: Balance the benefits of physically mailing the materials to shareholders versus the savings to be made when only posting documents online.
  • Virtual shareholder meetings: Favour hybrid meetings to enjoy the benefits of both virtual and physical meetings, if you can afford the costs.
  • Accessibility: Ensure you meet the new online disclosure requirements and consider translating documents for shareholder convenience.
  • Director-shareholder engagement: Adopt an engagement strategy and identify topics for a productive discussion with shareholders.

Review the summary on Norton Rose Fulbright's website.

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