| Socially Responsible Shareholdership in Canada |
CONCLUSION
The ultimate goal of a responsible shareholder is to engage in a continuous dialogue with a corporation, at whatever level is appropriate, in order to keep it informed about how it is meeting its social responsibilities. The ultimate goal of a responsible corporation is to seek advice and feedback from its stakeholders, including shareholding and non-shareholding stakeholders, on how it might improve its corporate social performance.Development and use of proxy voting guidelines will enable institutional investors to better understand the financial and non-financial goals that they might achieve by actively voting their proxies. Having guidelines on social and environmental concerns, and corporate governance matters, can greatly simplify the process of voting on shareholder proposals, allowing more time for reasoned consideration of particularly important items.
Researching an issue thoroughly is an important step before meeting with senior company officials to discuss remedies to any harmful social or environmental effects caused by corporate activities. Entering into a long-term dialogue, characterized by mutual respect and professionalism, leading to negotiated outcomes, is the essence of corporate engagement.
When dialogue stalls, active shareholders can resort to the submission of a shareholder proposal, to be voted on at the annual meeting of the company. Though proposals seldom receive the majority of votes, they often compel management to take some action if a significant percentage of the shareholders vote in their favour.
Divestment, if used as a last resort, can still be an effective action. This is particularly the case if the investor tells the company why it is selling its shares.
The purpose of this document is to act as a reference guide for those wishing to become more involved in matters of corporate governance and social responsibility. Readers are encouraged to pass along to the SIO any feedback, advice, or contributions of experience and knowledge that can add to our understanding of socially responsible shareholdership in Canada.
