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CCCA_V6No3_ProxyFights-FIN_CCCA_V6No3_ProxyFights 9/19/12 10:41 AM Page 20 Cover then said, ‘You know what? Maybe I should give it a shot too.’” Adds Brad Allen, senior vice-president with shareholder communications firm Laurel Hill Advisory Group in Toronto: “There’s always been a certain level of proxy fights here in Canada, but it’s one that has been primarily the domain of small- and mid-cap firms.What we’re having now, though, is an explosion of high- profile mega-cap companies [facing proxy fights.] It’s moved upscale.The reason for that is a correlation between overall investor confi- dence and stock market performance. During times of tough markets, we always see an increase in proxy fights as investors look at their investments and start asking questions.” Soliman says he has been involved in about 40 proxy battles over the past three and half years, representing both corporations and activist shareholders. He agrees that the level of activity has “increased substantially” since 2008; more important, though, he says that “we’re going to continue seeing an increase [in proxy fights] in Canada mainly because there’s evi- dence of success, whereas in previous years, many shareholders sat back and hoped that their board would turn things around. Now they know that if they spend some time and energy, they will achieve what they are looking for.” This is rattling corporate Canada, says Soliman’s partner, Orestes Pasparakis, because these actions have been“supported by relative- ly blue-chip investors,” meaning if these insti- tutional investors see a way to do a better job than the management group, they won’t hesi- tate to take action. Companies at risk, Pasparakis says, are underperformers in any sector and of any size.“No firm should believe it is not vulnerable if management is not per- ceived to be performing.” For example, if every company in a specific sector is down by 20 per cent in the stock mar- ket but you’re down by 30 per cent — and shareholders perceive that management has Cristina Circelli made bad decisions — then your firm would be General counsel susceptible.Even if the company is down by the CN Railway same margin as its peers,it could still be risk if it SPYROS BOURBOULIS Montreal shouldn’t be down by that much,or if it’s up but is not keeping pace with its competitors.“The 20 CCCA Canadian Corporate Counsel Association FALL 2012