There is a debate occurring in both Corporate Canada and Corporate America regarding access to proxy votes.
This debate is particularly relevant to condo corporations where proxies routinely ensure that condo elections are predetermined in advance of the Annual General Meeting.
One side argues that access to proxy votes is the best way to ensure a board is not, in essence, elected by the current board. In corporations, this is seen as a way for shareholders to put their own people on the slate for election. Some feel this is the best way to ensure independent, diverse and accountable people are elected to the board.
ExxonMobil argues against proxy voting when it states “The proposal could introduce nonconstructive and destabilizing dynamics into the board election process each year by potentially creating a shorter term orientation.” The company voices further concerns by stating “It can also increase the influence of special interest groups and lead to single-issue participants on the Board, to the overall detriment of other shareholders and the Company’s general interests.”
Concerns against proxy voting by ExxonMobil are particularly relevant to condo corporations..
In condo corporations, proxies are frequently viewed and used as a way to get uninformed condo owners to support friends or associates for election to a condo board regardless of their limited experience. Condo corporations are proof of the risks inherent in proxy votes controlling an election. There are many condo corporations that continuously suffer the ill effects of proxy elections without understanding this is the case.
There must be a better way.