Air Canada | Appointment of the external auditor

Status
8.63% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company HQ country
Canada
Resolved clause
It is proposed that the Board of Directors, depending on the duration of current contracts, calls upon other auditors given the number of shareholders who abstained from voting on this issue at the last annual meeting.
Supporting statement
Nearly half of the organizations we closely follow by attending their annual meetings have experienced high abstention votes regarding the nomination of their external auditors. These votes are not only expressed in relation to one accounting firm, but several, suggesting that shareholders wish to gain a new perspective on the reliability of the financial information provided to them and the independence of the accountants. The aim of rotating auditors is to reduce threats to their independence, largely caused by the familiarity that gradually develops over time. It is feared that in the long term, the auditor may become too close to the client. For example, the independence of the auditor can decrease when friendships arise: the auditor associates too closely with the interests of the client company’s executives, the audit plan becomes repetitive, or the auditor hesitates to make decisions that would suggest that his previous decisions were erroneous. In short, risks of familiarity with the client are likely to harm the rigour, objectivity, and professional scepticism of the auditor. Does the percentage of abstentions regarding the nomination of the current auditor reflect this opinion? We believe that such a service should be subject to a vision renewal at a higher frequency to assure shareholders that their auditors offer them the best service at a competitive price while ensuring a new approach to auditing by a different firm.

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.