Economy & Markets

A new SHARE report finds that companies incorporated law in Alberta lag on gender diversity, corporate governance and climate-related disclosure

By James Langton |


Shareholders in Alberta-based companies face needless legal obstacles to pursuing priorities such as corporate governance improvements, enhancing diversity and addressing climate change, according to a new report from the Vancouver-based Shareholder Association for Research and Education (SHARE).

Specifically, the SHARE report published on Thursday argues that shareholders in companies incorporated under provincial law in Alberta, the Alberta Business Corporations Act (ABCA), face a higher bar for getting shareholder proposals on the agenda.

"The threshold for filing shareholder proposals under the ABCA is far more onerous than in any other province as well as under the federal Canadian Business Corporations Act," says Kevin Thomas, director of shareholder engagement with SHARE, in a statement.

At the same time, the SHARE report states that ABCA-incorporated companies lag companies in the rest of Canada on issues such as gender diversity, corporate governance and climate-related disclosure.

"We looked at gender diversity amongst the board and senior management, certain basic corporate governance measures, and disclosures of information related to climate change and carbon emissions," the report states. "In each area, we found Alberta-incorporated companies, on average, to be lagging their peers in the S&P/TSX composite index."

For example, 35.5% of Alberta-incorporated companies on the S&P/TSX composite index had zero women on their board of directors in 2016 vs 10.8% of the companies incorporated in other jurisdictions, the report states.

"While there are many reasons for each company's individual performance, a dialogue between a company and its investors can help remedy problem areas," says Thomas. "Currently, shareholders of Alberta-incorporated companies are denied a valuable means of carrying out such dialogue."

Indeed, the group also notes that Alberta companies have received zero shareholder proposals on these issues this year.

"A simple amendment to the regulations under the ABCA could align Alberta with the rest of North America," says Thomas, "and allow shareholders to engage more fully with the companies they own."

Photo copyright: elen1/123RF