Corporate Governance Milestone

Bill Davis is a long time SRI activist. Bill sent this memo to the SIO listserve, and when I read it, I though everyone should be aware of what he has managed to do. Bill agreed that we could publish his victory on SRI Monitor.

As an individual shareholder, I filed a shareholder proposal with the CIBC seeking the provision of an abstention option on the proxy ballot. At the annual meeting, held April 28, 2011 in Winnipeg, my proposal received 65.67% support from shareholders.

I do believe this is the first time in Canada that a proposal from an individual shareholder actually received a majority vote of any size, let alone a significant one.

I take this as encouraging, in that institutional shareholders obviously took the time to consider an issue and exercise their judgement, regardless of the fact that the issue had not been extensively promoted and was filed by an relatively unknown shareholder. This is a step forward for shareholder democracy.

The wording of the proposal appears in the CIBC proxy material along with my explanation. Needless to say, media covering the meeting did not notice the historic first.

To provide a brief sketch of the history leading to the filing, I offer the following.

As a shareholder, I have encountered occasions when a proposal made sense but seemed awkward to implement, or flawed in some minor way. The management's opposition appeared not to address the intent of the proposal, as much as to dismiss it. I have then abstained to send the signal that more consideration is warranted. While abstention is permissible it has not been clear how it should be done. Proxy circulars from US corporations do provide a box to facilitate abstention. In an increasingly global investment climate, I felt Canadian shareholders deserved the same clarity.

I began my effort with a question from the floor of a CIBC meeting several years ago and followed this with the same question at the AGM of Manulife Financial. After 4 years of correspondence with both corporations, I decided things would not change without engaging all shareholders through a proposal. I filed first at Manulife, for their 2010 annual meeting and they agreed to provide the abstention box, so I withdrew my proposal. Now that the will of the shareholder body is more clearly defined, I plan to be in touch with a number of corporations over the summer to expand the provision of an abstention box to facilitate those who choose to abstain.

Thank you Bill!