CANADA Trends and Developments Contributed by: Bill Gilliland, Dentons Canada LLP
viding initial guidance in February 2022. The guidance focuses on disclosure concerning shareholder access and participation at virtual meetings, and shareholder participation at virtual meetings. In terms of disclosure, the CSA suggests that report - ing issuers provide: • clear and comprehensive disclosure in manage - ment information circulars and associated proxy- related materials concerning the logistics for accessing, participating and voting at a virtual shareholder meeting; • full explanations of the registration, authentication and voting process for shareholders; • shareholders with information concerning the procedures for how shareholder questions will be received and addressed, and how shareholder participation will otherwise be accommodated and managed at the meeting; and • contact information where shareholders can obtain assistance in the event of difficulties during the registration process or while accessing and attend - ing the meeting. In terms of shareholder participation, the CSA sug - gests that reporting issuers provide for a level of shareholder participation at a virtual meeting that is comparable to that which a shareholder could reason - ably expect if they were attending an in-person meet - ing. This would include opportunities to make motions or raise points of order, and the ability to raise ques - tions and provide direct feedback to management in any question-and-answer segment of the meeting. Proponents of shareholder proposals accepted to be voted on at the meeting should typically also be given the opportunity to speak to the proposal. Glass Lewis has clarified its expectations that com - panies should engage with their shareholders when determining the format for their annual shareholder meetings. When in-person attendance is not per - mitted, companies must provide a rationale for this choice. While Glass Lewis does not make voting rec - ommendations based solely on shareholder meeting format, it may recommend voting against the chair of the governance committee, or another relevant direc - tor, where the board has failed to sufficiently respond
to legitimate shareholder concerns regarding the meeting format. Similar to Glass Lewis, ISS raises concerns about virtual-only shareholder meetings. ISS recommends voting against proposals to amend or adopt the company’s articles or by-laws, to include a provision that gives the directors discretion to hold virtual-only shareholder meetings without compelling rationale. The CCGG has also expressed concerns about vir - tual-only shareholder meetings and advocates for hybrid or in-person meetings. These expectations are consistent with shareholder sentiment. In the 2025 proxy season, shareholder pro - posals opposing virtual-only meetings continued to attract some of the highest levels of shareholder sup - port, reflecting ongoing investor sensitivity to share - holder rights, access, and board accountability. The Globe and Mail Board Games governance rankings reinforce this trend, awarding full marks only to com - panies that hold hybrid meetings, and zero marks for meetings held only in person or only virtually. Board Oversight of AI As generative AI continues to grow and be adopted at an unprecedented speed, it is accompanied by demands from stakeholders for board oversight and guardrails. Regulators across the globe are exploring legislation that would curtail the use of certain types of AI. In 2023 in the US, for the first time, there were shareholder proposals calling for disclosure on the board’s oversight of AI and ethical guidelines on the use of AI. In response, boards and management can take a number of actions to address such concerns, includ - ing: • understanding the use cases of current AI technol - ogy for the business; • understanding the risks inherent in the use of AI technology; and • developing an AI governance policy to help address current risks and to provide a framework to address what is yet to come.
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