Davies Governance Insights 2011

Trends for 2012

Shareholder engagement on issues they believe drive value—such as the composition of the board, strategic direction, and the alignment of compensation with performance—will continue.
The adoption of majority voting (already strong in 2011) will continue to grow, becoming a generally accepted "best practice" in the next few years. Effective majority voting requires the adoption of voting for individual directors rather than a slate, the reporting of voting results related to individual directors (how many votes "for" and how many withheld), and adopting consequences for directors from whom a majority of votes has been withheld (leading up to and including resignation).
Shareholders will have their "say on pay" at more and more annual general meetings. More than two-thirds of TSX 60 issuers are expected to put say-on-pay resolutions to their shareholders during the 2012 proxy season, up from a little more than half in 2011.
Companies will continue to receive shareholder proposals on a wide variety of issues, although they are expected to have little influence on governance practices in 2012. During the 2011 proxy season, only two proposals voted on by shareholders succeeded. A total of 72 proposals were made to 25 issuers; 20 of which were withdrawn.
Concerns with the integrity of the proxy voting system will continue to grow, particularly among institutional investors.