The Handbook of Board Governance, 2nd Edition

46Director/Shareholder Meetings

Stephen Erlichman LLB (Toronto) LLM (New York) MBA (Harvard)

Past Executive Director, Canadian Coalition for Good Governance

Introduction

In this chapter, I (i) provide reasons why directors and institutional shareholders should proactively carry out private engagement meetings, (ii) set out public commentary about director/shareholder engagement in various jurisdictions, (iii) describe how the Canadian Coalition for Good Governance (where I was the executive director for seven years) carries out director/shareholder engagements, and then (iv) provide my thoughts on carrying out director/shareholder engagements, informed by my prior role as the executive director of the Canadian Coalition for Good Governance and my role advising companies and institutional investors as a practicing corporate/securities lawyer at major law firms in the United States and Canada over the past 35 years.

Why Engage

There are many reasons why both institutional investors and directors of the companies in which they invest should engage privately with one another. From the perspective of an institutional investor, private director/shareholder engagement allows shareholders to:

1. Better understand how a board of an existing or prospective investee company operates and whether the directors appear to be knowledgeable about issues of importance to the institutional shareholder.
2. Ask questions directly to independent directors without being filtered through management and ...