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The Annual General Meeting: A tool for unlocking productive company engagement

Through our engagement program, SHARE enters into constructive and focused dialogue with companies on key environmental, social and governance issues, allowing shareholders’ views to be heard and resulting in improvements in corporate policies and practices.

Most companies welcome this dialogue. For boards and management, it allows for useful feedback and brings new ideas and concerns to the table. Occasionally, however, SHARE faces situations where companies are unresponsive. We believe boards and management should be responsive to respectful engagement by shareholders, and sometimes when that is not forthcoming, participation in an Annual General Meeting (AGM) can be the key to unlocking a productive company engagement.

This quarter, we sent a letter to Emera Inc., an energy utility company with subsidiaries in the US, Canada and the Caribbean, asking about the company’s long-term strategy for climate risk management and raising specific questions about the company’s climate risk assessment procedures, disclosure, emissions reduction targets and renewable energy investments. While Emera has taken some important steps to shift to lower-carbon energy sources, its performance outside of Canada had raised some concerns.

Despite numerous attempts to reach out, the company was not responding. So SHARE notified the company that we were planning on attending the company’s AGM on behalf of a shareholder client to ask questions publicly about its long-term climate risks. The company immediately arranged a meeting with SHARE where we discussed the company’s efforts to work towards low carbon solutions across all of its operating jurisdictions. Emera indicated its interest in working with SHARE on developing appropriate targets, performance and scenario planning going forward. Emera also committed to issuing a written response to the specific questions set out in our letter.

Just a few weeks later, we were at the AGM of Brookfield Asset Management Inc., a global alternative asset manager, inquiring about the company’s management of human and labour rights risks in its construction projects – via Brookfield Multiplex – in Qatar. Reports of widespread injuries and deaths in the sector, as well as the use of forced migrant labour, require expanded due diligence by companies operating in the country. Although Brookfield responded to SHARE’s earlier inquiries with a letter, many questions were left unanswered. Yet our request for further dialogue about employee access to passports, the effective role played by workers in worksite health and safety committees, ongoing subcontractor due diligence, and better disclosure of OHS performance metrics were rebuffed.

At the company’s AGM, SHARE raised a question from the floor about health and safety and forced labour in the company’s Qatar operations. Both the CEO and CFO responded, stating that they are very attentive to these risks in all of their operations and agreed to look into this closely. After the meeting, SHARE spoke with the Chair of the board’s Risk Management Committee and the CEO, who asked their investor relations staff to provide a more substantial response to our questions.

As it happened, the Emera and Brookfield AGMs proved to be catalysts for eliciting positive dialogue with companies and focusing management’s attention on the issues and questions we were asking. While SHARE welcomes private dialogues between boards, management and shareholders, at times shareholders also need to exercise their right to speak at company AGMs and, in some cases, to file shareholder proposals, to move those dialogues forward.

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