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In the September 2022 issue of Computershare Connection, we reported on changes to director voting that came into effect August 31, 2022. Just in time for the upcoming meeting season, the Canadian Securities Administrators (CSA) recently published Coordinated Blanket Order 51-930 which provides an exemption for reporting issuers incorporated under the Canada Business Corporations Act (CBCA).
Let’s take a step back. Last August, the changes to director voting for CBCA-incorporated companies came into effect. The CBCA amendment stated that voting for individual director nominees in an uncontested election was changing from “for” and “withhold” to “for” and “against”. In addition, there was a majority voting requirement that a director must receive at least 50% of the vote to remain on the board, otherwise he or she must resign.
Our September article discussed the potential discrepancy between the CBCA amendment and Canadian securities legislation National Instrument 51-102 – Continuous Disclosure Obligations. The securities legislation NI 51-102 states that director voting options must be “for” and “withhold”. There was speculation that issuers may need three options for director voting: “for”, “against” and “withhold”, or potentially “for” and the hybrid “against/withhold”.
To address the inconsistency and clarify the applicable rules, the CSA published Blanket Order 51-930 – Exemption From the Director Election Form of Proxy Requirement on January 31, 2023. This Order exempts “CBCA-incorporated reporting issuers from the requirement to specify that securities be voted or withheld from voting in respect of the election of directors, as required by subsection 9.4(6) of NI 51-102, where the reporting issuers comply with Majority Voting Amendments.”1 Put simply, voting options for CBCA-incorporated company director elections will be “for” and “against” only.
CBCA-incorporated companies should continue to consult with their legal counsel in preparation of their proxy and meeting materials for 2023. If you have any questions about preparing for your annual meeting, please contact your Computershare relationship manager.