Will Osler comments in Activistmonitor on how majority voting for directors in uncontested elections is becoming increasingly prevalent in Canada, and how it will help to strengthen corporate governance and shareholder democracy.
"This development will strengthen the position of activist shareholders, said William Osler, a lawyer at Bennett Jones. Majority voting is replacing the long-standing plurality voting system, in which a director can be elected even if 99% of shareholders withhold their votes regarding that director, he explained.
Majority voting replaces "withheld" votes with "against" votes, requiring a director to achieve more "for" than "against" votes to be elected, Osler further explained. He called this part of a trend of greater shareholder democracy and linked this issue with the movement to have directors voted on individually, rather than as part of a slate.
Directors have been elected in Canada despite a majority of shareholders withholding their votes, Osler said, which is not ideal.
Many other countries have fully embraced majority voting, Osler said, making Canada a global outlier."
"Majority voting trend in Canada is positive but complex – lawyers" is written by Mark Coakley.
