We have compiled a quick reference guide for 35 of the most frequently asked questions about shareholder meetings, including questions concerning who can speak at meetings, whether shareholders can replace the Chair, and whether shareholders can move to remove directors at meetings. We have also included a sample chair’s script for an annual meeting.
Please note, these materials have been prepared for use by corporations incorporated under the Business Corporations Act (Alberta) (the ABCA), whether or not they are listed on a Canadian exchange.
Who is entitled to speak at a meeting?
Registered shareholders, their proxies, directors and the auditors are entitled to speak at the meeting. The majority can determine who else is entitled to speak. Beneficial shareholders do not have a right to speak, but are typically afforded this privilege unless they are disruptive.
Can a shareholder move to replace the Chair of a meeting?
If the corporation’s by-laws specify the identity of the Chair and prevent her appointment by the meeting, the meeting cannot move to replace the Chair unless the Chair breaches the duty to conduct the meeting in a fair and impartial manner. Absent such a breach, the only remedy for a shareholder is to apply to the Court to order a new meeting.
When the Chair has been appointed by the meeting, the Chair may be replaced by the meeting. The procedure in this case is a vote of non-confidence, with the Chair having the opportunity to reply to the motion. If the motion passes, the Chair must vacate the position and the meeting must appoint a new Chair.
Can a shareholder move to remove a director from the board at a meeting?
A shareholder or proxyholder cannot move to remove a director at a meeting unless notice has been given of that proposed action, using the dissident proxy solicitation process. However, shareholders and proxy holders can make nominations for the election of directors from the floor. Such a motion may be made even if no notice was given to shareholders unless the corporation has adopted “advanced notice” by-laws which require that notice of such nominations must be given before the meeting.
The right of nomination from the floor has limited utility because no proxies may be collected supporting the nomination unless they were properly solicited by proxy circular. It is very difficult to marshal the required votes at the meeting, where most votes will be controlled by management through the management proxy solicitation process.
A shareholder who wishes to remove a director must send a new notice proposing that change to all shareholders before such a motion could be considered at the meeting. Additionally, the process would need to comply with the dissident proxy solicitation requirements, including the provision of a dissident proxy circular (subject to the use of certain exemptions which also require giving notice to the corporation). The removal of directors is carried out by way of an ordinary resolution at a special meeting that is called for such a purpose, which would typically have to be requisitioned.
For all of the FAQs, please see the full publication.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
