CANADA Trends and Developments Contributed by: Bill Gilliland, Dentons
tunities to make motions or raise points of order, and the ability to raise questions 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 companies should engage with their sharehold - ers when determining the format for their annual shareholder meetings. When in-person attend - ance is not permitted, companies must provide a rationale for this choice. While Glass Lewis does not have a policy based solely on share - holder meeting format, it may recommend voting against the chair of the governance committee, or another relevant director, where the board has failed to sufficiently respond to legitimate share - holder 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 dis - cretion to hold virtual-only shareholder meetings without compelling rationale. The CCGG has also expressed concerns about virtual-only shareholder meetings and advocates for hybrid or in-person meetings. Written Resolutions of Shareholders Corporate statutes in Canada have long contem - plated that shareholders can sign written resolu - tions in lieu of holding a shareholder meeting. Typically, these resolutions need to be signed by all shareholders to be valid, and so have been a helpful tool for closely held corporations. On 28 March 2023, amendments to the ABCA came into force allowing for written resolutions signed
by holders of at least two thirds of the shares entitled to vote at the shareholder meeting to be valid as if passed at a meeting. The reduced threshold is eligible only for private Alberta Cor - porations, and brings the ABCA into alignment with other corporate statutes in Canada (such as in Ontario and British Columbia) that permit non-unanimous written resolutions. Canadian Director Residency Requirements Canadian corporate statutes have required that a certain percentage (typically 25%) of the direc - tors of a corporation be Canadian residents. “Canadian resident” has been defined to include Canadian citizens and permanent residents, in each case, who are ordinarily resident in Canada. In March 2023, the Business Corporations Act, 2021 (Saskatchewan) was amended to remove the Canadian resident director requirement. In its place, corporations without a director or officer who is a Saskatchewan resident must designate an attorney in Saskatchewan. The Saskatche - wan amendment is in line with the majority of Canadian provinces and territories including British Columbia, Alberta, Ontario, Quebec, Nova Scotia and New Brunswick. Interlocking Directorships Glass Lewis believes that a board should be wholly free of people having identifiable conflicts of interest. It generally recommends that share - holders withhold votes from affiliated or inside directors where the director has an interlocking relationship with one of the company’s execu - tives. Top executives serving on each other’s boards creates an interlock that poses conflicts that should be avoided to ensure the promotion of shareholder interests above all else. Glass Lewis also considers interlocking relation - ships with close family members of executives
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