Virtual Shareholder Meetings During the Pandemic

As shareholder meetings are increasingly held virtually due to the pandemic, our Asset Stewardship team outlines our voting approach to management proposals on this topic, expectations for shareholder engagement best practices and guidance on preserving robust shareholder rights.

Assistant Vice President, Asset Stewardship
Vice President

Due to the ongoing nature of the COVID-19 pandemic, there continues to be a need for virtual shareholder meetings (“VSMs”) globally. Many companies are proposing amendments to their governing documents that grant the board the ability to host VSMs at their own discretion in perpetuity.

In instances where companies are asking shareholders to vote on this topic, we will generally be supportive of proposals that feature:

  • Strong disclosure detailing the rationale for why the company should be granted this ability, and how shareholder rights will be protected in a virtual-only meeting format.
  • Time-bound commitments to this ability expiring (e.g. 1 year); and/or.
  • Commitment to putting this ability to a shareholder vote again at the following year’s annual general meeting.

Our evaluation of these proposals will also consider the operating environment of the company, including local regulatory developments and specific market circumstances impacting virtual meeting practices.

While we were encouraged by the success of VSMs in 2020 and 2021, companies and shareholders must remain vigilant in continuing to improve their VSM practices. Maintaining a strong level of shareholder dialogue, upholding shareholder rights, and leveraging the virtual format to benefit companies and investors will be essential in the 2022 proxy season that will continue to feature virtual meetings.

When conducting annual meetings virtually, we expect that companies preserve all the rights and opportunities afforded to shareholders through a physical meeting. Shareholders should be able to have active and robust interactions with management and the board at appropriate times, regardless of the hosting format.

For companies hosting VSMs in 2022, we expect the following shareholder engagement practices:

  • Providing specific and reasonable guidelines for shareholders to ask questions of management and the board,
  • Displaying all reasonable questions posed during the meeting, and
  • Disclosing clear procedures for questions received during the meeting, but not answered due to time or other restrictions.

When permissible and safe, as determined by local authorities, we look forward to the return of in-person shareholder meetings. Our team will continue to engage and provide guidance on this subject as practices evolve.

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