The Evolution of Shareholder Activism in Canada

Abstract

The shareholder democracy phenomenon is becoming increasingly successful all over the world. This article proposes a description of shareholder activism on the Canadian market since its beginning, at least 15 years ago. First of all, the conceptual framework is based on the conflict of interest opposing on the one hand executive officers and shareholders, and on the other, the controlling shareholders and the minority shareholders. Then, using the SHARE database, the characteristics of Canadian activism are assessed, which has notably been set apart by the presence of a pioneer activist, in this case an association for minority shareholders, MEDAC which targeted banks. Finally, although the phenomenon is an emerging one, the proposals of activists have been rather successful, which can be seen through the high percentage of resolution votes, thus contributing to curbing the behavior of the targeted firms when it comes to some firm governance issues.

Keywords: Shareholder Activism, Resolution Proposal, MEDAC, SHARE

JEL Classification: G30, G32, G34, G38