Kingsdale Advisors Unveils 2018 Proxy Season Review
Report leverages Kingsdale's 15 years of expertise as the most trusted strategic shareholder advisory firm; spotlights trends for 2019
TORONTO, Sept. 20, 2018 /CNW/ - As part of Kingsdale Advisors' 15th anniversary celebration, Kingsdale releases its 2018 Proxy Season Review, the industry's preeminent report highlighting the major events of the preceding proxy season, important developments in corporate governance, and the trends that will matter in 2019.
"Kingsdale owes its 15 years of success to the ever-growing roster of clients who have made us the go-to strategic advisor. I founded Kingsdale because I saw a gap in the marketplace and wanted to provide premium advisory services to meet the needs of Canadian boards and management. Our annual Proxy Season Review is our way of saying thanks and continuing to advance the industry," said Kingsdale's Wes Hall, Executive Chairman and Founder.
"2018 is on pace to be another eventful year for shareholder activism in Canada but what's changed is the fact management has struck back, driving activist success rates down. This is opposite to what we are seeing in the U.S. and speaks to the steps Canadian boards have taken in recent years to prepare. But there is more work to be done. Directors are under increased scrutiny, proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis are tightening their policies, and issues like diversity, the environment, and social matters are becoming key voting items. No proxy voting item can be considered routine and heightened vigilance is constantly required."
Some of the most noteworthy developments in 2018 include the following:
Proxy contests up, activist wins down. Just over halfway through this year, we're on pace for more proxy fights than in 2017, with new battles surfacing daily. Meanwhile, activist success rates have declined to 50% compared to 63% last year.
Gender diversity in corporate boardrooms advances (slowly). New policies, implemented earlier this year, by proxy advisors ISS and Glass Lewis, have contributed to gains in gender diversity: Notably, all TSX 60 constituents came to their 2018 annual general meetings with at least one woman on board and only 3% of S&P/TSX Composite Index boards lack female representation. While TSX mainboard issuers still considerably lag behind, with 29% of boards lacking female representation, new proxy advisor polices to be implemented at the beginning of 2019 that demand a formal gender diversity policy and female representation, should motivate boards to be proactive in recruiting more women.
The new reality of decentralized voting. Historically more resources have been allocated to winning over ISS and Glass Lewis than engaging shareholders. Increasingly, institutional investors are making their own decisions when it comes to voting rather than blindly following the recommendations of ISS or Glass Lewis. Many investors have established or expanded in-house governance groups that coordinate outreach, research ballot items, and make voting decisions independent of the proxy advisors. For issuers in 2019, this means shareholder engagement will be more important than ever before.
Environmental, Social, and Governance (ESG) investing continues to grow at a dramatic pace. Thanks, in part, to demographic shifts, ESG investing is now estimated at over US$20 trillion AUM, with ESG being integrated into portfolios at a growth rate of 17% a year. Investor interest has manifested itself in the 2018 proxy season with increased support levels for ESG proposals in Canada. Boards must prepare themselves as this trend will grow with institutional investors and activists taking a greater interest in ESG.
"The 2018 Proxy Season Review is a culmination of what our team – the most experienced in Canada –has learned this year, and indeed over the past fifteen years," said Amy Freedman, Chief Executive Officer. "We give you all the facts and figures but what makes us and our commentary unique is the thought leadership and superior analysis our team conducts. It's this in-house governance expertise coupled with our continued shareholder engagement that allows us to advise directors and management on the best way to meet the changing expectations of investors."
In conjunction with the release of the 2018 Proxy Season Review, Kingsdale will present its findings at events in Toronto (Sept. 20), Calgary (Sept. 25), Montreal (Oct. 2), and Vancouver (Oct. 11). For more details visit KingsdaleAdvisors.com or email [email protected].
Download the full version of Kingsdale's 2018 Proxy Season Review here.
About Kingsdale Advisors:
With offices in Toronto and New York, Kingsdale Advisors is the leading advisor to public companies on all shareholder, governance, and transaction related matters having acted on the largest and highest profile proxy fights, transactions, and other special situations. Since 2003, public companies across North America have looked to the expertise of Kingsdale Advisors to secure the success of transactions or resolutions driven by shareholder votes. Kingsdale Advisors' multidisciplinary team offers an array of specialized services focused on strategic and defensive advisory, governance advisory, compensation advisory, strategic communications, voting analytics, and creative services.
SOURCE Kingsdale Advisors
Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416.867.2333, Cell: 647-621-2646, Email: [email protected]
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