Majority Voting Policy Found to Be Oppressive

Majority Voting Policy Found to Be Oppressive

Considerations for Director Elections During COVID-19

With the economy and the capital markets absorbing the impact of COVID-19, the 2020 proxy season is about to begin. Plunging stock prices can lead to investor dissatisfaction, which can in turn be reflected in shareholder votes. Majority voting (required for TSX listed issuers) allows shareholders to vote down director candidates nominated in an uncontested election. It is the one mechanism shareholders have to hold individual directors accountable (other than calling a special meeting to remove a director). Could majority voting be misused, to achieve a result other than director accountability to shareholders? Earlier this year, an Ontario court found that the majority voting policy of one issuer had done just that…

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