On July 5, 2018, the Ontario Securities Commission (“OSC”) released its annual Statement of Priorities (the “Statement”) for the financial year to end March 31, 2019. The Statement outlines the most pressing issues that the OSC hopes to address in connection with the administration of the Securities Act, regulations and rules. While investor protection is … Continue reading
A fee-shifting by-law in the shareholder litigation context, “obligate[s] the plaintiff-shareholder to reimburse the corporation’s expenses (including attorneys’ fees and other costs) when the plaintiff [is] unsuccessful in litigation.” Shareholder litigation in the United States operates under the “American Rule” which provides that each party is responsible for their own attorney’s fees. Unlike South of … Continue reading
In a recent post about Canadian proxy contest trends, we discussed the growing concern with “The Active Passive investor” and potential issues on the horizon given a surge in the use of “withhold” campaigns. As of late, the prominence of withhold campaigns to signal shareholder discontent to boards of directors in North American markets has … Continue reading
Recently, Activist Insight released a report on activist short selling. Activist short selling is when investors publicly bet on a stock going down in value. Among other interesting trends, the report shows that Canada ranks number 3 in the world for activist short campaigns. The data suggest that Canadian companies should be on high alert … Continue reading
Shareholder activism has steadily been on the rise in Asia in the past seven years, but is it here to stay? According to a recent report published by J.P. Morgan in May 2018, the numbers seem to support this proposition. As outlined in the report, only 10 shareholder activist campaigns took place in Asia in … Continue reading
Bill C-25 received Royal Assent on May 1, 2018. The bill will amend the CBCA by: reforming certain aspects of director elections; creating requirements for public companies to disclose officer and director diversity representation; and introducing the new Notice-and-Access Regime. While some of the CBCA amendments have come into force, many of the amendments – … Continue reading
In late 2014, the Canadian Securities Administrators (CSA) published “comply or explain” rules regarding female representation in director and executive officer positions. The requirements were codified in National Instrument 58-101 (the Disclosure Requirements) and created a positive duty for issuers in participating jurisdictions to disclose the details of female representation, including issuers’ targets, policies, and … Continue reading
In a recent post, we discussed investors’ growing interest in environmental and social (E&S) governance. As a recent report published by the Canadian Coalition for Good Governance (CCGG) demonstrates, public company boards are no less attentive to growing shareholder interest in E&S issues. The Directors’ E&S Guidebook (Guidebook), which is the product of consultations with … Continue reading
Background: Registered Shareholders and Beneficial Shareholders While a registered shareholder holds its shares directly with a company and can be contacted through its transfer agent, a beneficial shareholder does not have the shares registered in its name. Instead, a securities depository is the registered shareholder. There are two types of beneficial shareholders, a Non-Objecting Beneficial … Continue reading
The Canadian Securities Administrators (the “CSA”) have issued CSA Staff Notice 61-303 and Request for Comment – Soliciting Dealer Arrangements (the “Notice”) on the use of soliciting dealer arrangements. “Soliciting dealer arrangements” generally refer to agreements entered into between issuers and investment dealers under which the issuer agrees to pay to the dealers a fee … Continue reading
Activist Insight recently published the fifth annual edition of The Activist Investing Annual Review (the Review). The Review analyzes global activist investing trends over the past few years, with an emphasis on 2017, forecasts developments expected in 2018, and breaks out key statistics by jurisdiction. The 2018 Forecast The Review identifies four big trends expected … Continue reading
Discussions around board gender diversity are picking up steam in the lead up to the 2018 proxy season. Some of the leading proxy advisory firms, namely the Institutional Shareholder Services (ISS) and Glass Lewis & Co. LLC (Glass Lewis), appear to have caught wind of the discussions – both firms added a voting policy in … Continue reading
Glass, Lewis & Co., LLC (Glass Lewis), a leading governance and proxy voting firm, has recently released its 2018 Policy Guidelines for Proxy Advice in Canada. The following are three of its key changes from the 2017 Policy Guidelines: Board Gender Diversity In the new year, Glass Lewis will not make voting recommendations solely on the … Continue reading
On November 1, 2017, the staff of the US Securities and Exchange Commission’s Division of Corporation Finance (Staff) provided important guidance to companies and shareholders on how Staff will evaluate arguments to exclude shareholder proposals from proxy materials. Among other considerations, the Staff Legal Bulletin No. 14I (CF) (the Bulletin) deals primarily with the “ordinary … Continue reading
Shareholder activism is now a global phenomenon. Activists commonly seek to shake up the board of a target company in hopes of instilling change and increasing shareholder value. The impact on target companies can be both disruptive and enduring – often resulting in turnover among top management and in particular chief executive officers (CEOs). A … Continue reading
On November 16, 2017, Institutional Shareholder Services (ISS) released its 2018 Americas Proxy Voting Guidelines Updates (the Updates). These updates implement changes in a number of areas, with the most significant being a gender diversity policy and new criteria for determining when a director is “overboarded”. Except where indicated below, the changes are effective for … Continue reading
The Canadian Real Estate sector may be in for a shake-up. Reuters recently reported (here) that activists may be eyeing real estate investment trusts (REITs), and their approximate combined C$67 billion in market capitalization, as ripe targets for activist campaigns in light of: attractive prices, vulnerability in the market based on uncertainty surrounding the effects … Continue reading
Kingsdale Advisors (Kingsdale) recently released its annual Proxy Season Review for 2017. The report examines trends observed in 2017 and provides analysis on what the future may hold for Canadian proxy contests. The report also outlines strategic recommendations for Canadian companies. Looking back – trends from 2017 Shareholder activism: alive and well. Kingsdale reports that … Continue reading
Activist investors engaged in proxy fights typically mount aggressive public relations campaigns in order to undermine shareholder confidence in a target company’s performance and leadership, whether through social media, online forums or by using the more traditional PR channels. In response, target companies have turned to a number of defensive measures, many of which have … Continue reading
Shareholders are placing increased value on non-financial factors when making investment decisions. Some of these factors are environmental and social issues. In particular, shareholder proposals on climate change have recently gained some traction. In 2016, a record breaking number of climate change resolutions were filed. This shift in focus is attributed to the 2015 Paris … Continue reading
Social media has changed how we live. We have access to extensive information and global connections at our finger tips. Given its already well-established presence in our personal lives, it comes as no surprise that social media has become a popular platform for campaigning activists. In fact, 2017 marks one decade since an individual shareholder … Continue reading
In a report entitled “M&A Activism: A Special Report”[1] (the Report), the editor-in-chief of Activist Insight describes the types of companies most at risk of being targeted by shareholder demands, providing steps that can be taken to increase the resilience of M&A transactions. The Report identifies a number of trends and findings, as summarized below: … Continue reading
Activist hedge funds have grown up and gone global, reinforcing the need for companies of all shapes and sizes to plan ahead for the possibility of an attack. A recent article by Martin Lipton in the Harvard Law School Forum of Corporate Governance and Financial Regulation reviews recent developments in the activist landscape and reconfirms … Continue reading
Activist interventions are being increasingly resolved by way of settlement agreements, with 3% of activist interventions in 2000 having resulted in a settlement agreement versus 16% in 2011.[1] In light of this emerging trend, the Columbia Business School recently published a paper, Dancing with Activists, in which the authors sought to provide the first systematic … Continue reading