When Canada’s most valuable companies held their annual general meetings this year, shareholders faced a new item on the ballot alongside routine votes to elect directors and approve executive pay.
A proposal from Quebec’s investor-rights organization, the Movement for Education and Defence of Shareholders (MÉDAC), focused on artificial intelligence. It asked 14 companies — including Canada’s largest banks, retailer Dollarama Inc., and telecom leader BCE Inc. — to endorse the federal government’s voluntary AI code of conduct.
AI-related shareholder proposals mark a new frontier
Governance experts say this wave of AI-related resolutions is likely the beginning of an annual trend that will expand beyond the country’s biggest firms.
“This is a new frontier for shareholder proposals in Canada,” said Renée Loiselle, a Montreal partner at Norton Rose Fulbright.
“Last year, AI wasn’t on the ballot. Companies weren’t receiving shareholder proposals about AI — this year, they absolutely are.”
Loiselle and other corporate-governance observers link the uptick in AI-related proposals to the rapid rise and adoption of artificial intelligence.
Although AI has existed for decades, recent leaps in capability and a rush to innovate following the launch of OpenAI’s ChatGPT in 2022 have accelerated adoption across industries. That expansion has also made the technology’s risks more visible: some systems produce fabricated or misleading information, and others raise worries about job displacement, cybersecurity threats, and broader societal impacts.
Shareholders have taken notice, said Juana Lee, associate director of corporate engagement at the Shareholder Association for Research and Education (SHARE).
“In Canada, over the past year or two, more investors and shareholders are paying attention to AI,” she said. “At SHARE, our clients increasingly prioritize thinking through what ethical AI means and what it implies for the companies they invest in.”
That shift in investor focus also showed up in a proposal filed by two funds affiliated with the B.C. General Employees’ Union at Thomson Reuters Corp.
The resolution asked Thomson Reuters to revise its AI framework to align with the United Nations’ business and human rights principles. The motion received 4.87% shareholder support.
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Mixed responses to the federal AI code of conduct
MÉDAC’s campaign specifically referenced Canada’s voluntary AI code of conduct, launched by the federal government in September 2023. The code currently lists 46 signatories, including BlackBerry, Cohere, IBM, Mastercard, and Telus. Signatories pledge to incorporate risk mitigation into AI systems, use adversarial testing to uncover vulnerabilities, and monitor harms caused by the technology.
MÉDAC chose the code because Canada lacks comprehensive domestic AI legislation and because many large companies have already endorsed the voluntary standards, said director-general Willie Gagnon.
Some firms MÉDAC approached already have internal AI policies but declined to sign the federal code.
“A few told us the code is mainly meant for companies that develop AI, but we disagree — several signatories aren’t AI developers yet signed the code,” Gagnon said.
Several banks told MÉDAC they plan to sign the code soon; to date, only CIBC has done so.
In several cases, productive dialogue led MÉDAC to withdraw proposals after reaching constructive agreements with companies.
Where votes did proceed, the resolutions failed to pass. Support ranged from as high as 17.4% at TD Bank to as low as 3.68% at engineering firm AtkinsRéalis Group Inc.
Engagement, not just votes, can drive change
Loiselle emphasized that the success of a shareholder proposal should not be measured solely by whether it passes. “The purpose of these proposals is often to spark engagement,” she said.
Filing a proposal can prompt companies to disclose more about how they use AI or signal to management that the issue matters to shareholders, opening the door to further conversation.
Lee has seen shareholder engagement produce concrete outcomes. SHARE recently engaged with a major Canadian software company whose business heavily relies on AI but that lacked board oversight and disclosure around the technology.
As a result of engagement, the company agreed to add AI oversight to its board charter and to increase disclosure about its AI use in its annual sustainability report, Lee said.
“That’s a positive development that leads to greater transparency,” she added.
Both Lee and Loiselle expect Canadian shareholders to continue pushing for stronger AI standards, taking cues from U.S. proxy-season activity.
In the United States, AI-related proposals first emerged around two years ago and have targeted major companies such as Apple, The Walt Disney Co., and Netflix, where a motion to disclose AI use and adopt ethical guidelines garnered 43.3% support. The breadth and frequency of AI requests in the U.S. have since expanded, a trend that is likely to be mirrored in Canada.
“The landscape for shareholder proposals is changing,” Loiselle said. “And that change appears to be here to stay.”
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