Recently, SHARE expanded its database of shareholder proposals filed at Canadian companies so that it now includes proposals filed from 2000 to 2008.
The 187 proposals added to the database were filed in the years 2000 to 2003. Most of these proposals were filed at Canada’s seven largest chartered banks. The record of vote results set out in the Shareholder Resolution Database is less complete. Public companies were not required to provide the results of shareholder votes prior to 2004.
Collectively, shareholder proposals filed over nine proxy seasons in Canada illustrate two things: i) the general subjects of concern to proposal filers have remained largely the same; and, ii) proponents have been very successful in bringing about many of the specific changes they have put forward.
Board of Director independence
The composition and conduct of the board of directors has been the focus of many shareholder proposals over the years. Shareholders have repeatedly applied pressure to separate the positions of board chair and company CEO by way of proposals. They argued that directors who are charged with overseeing management must not be faced with the inherent conflict of also being a member of management. In cases where vote tallies are available, they show that these proposals fared very well with shareholders, and an independent board chair is now widely accepted in Canada as a basic governance requirement.
Director attendance has also been the focus of many proposals. Filers of such proposals argued that a director who does not attend a reasonable proportion of board and committee meetings is unlikely to be able to properly represent shareholders’ interests, and is therefore not a good candidate for reelection. Proxy advisory services and most large institutional shareholders in Canada now carefully consider each director’s attendance record when evaluating their suitability for reelection.
Executive compensation has been an issue of longstanding concern to shareholders. In 2000, the Association for the Protection of Quebec Savers and Investors (APEIQ) proposed that the compensation committee of the board at each of Canada’s largest banks ‘justify’ the compensation paid to executives. The most recent reforms to the executive compensation disclosure requirements in Canada asks public companies to produce a Compensation Disclosure and Analysis report (CD&A) which is to include exactly what APEIQ was seeking with its proposal.
SHARE anticipates providing further historical expansion of its Resolution Database in the near future.