Canada: Harnessing Social Media In Proxy Contest: Not Just "Social"

Social media has revolutionized how stakeholders receive information about companies. An estimated 1.79 billion people used social media in 2014; 2.44 billion will by 2018.1 Despite such staggering statistics, social media has not been leveraged to its full potential in Canadian proxy contests. According to a 2013 survey,2 a majority of directors on the boards of Canada's largest companies acknowledged that they did not know much about social media.

This is the first of two posts about harnessing social media in Canadian proxy contests. It reviews the use of social media to influence public discourse and proxy contests in the U.S. and Canada. Our second post will review some legal considerations applicable to the use of social media in Canadian proxy contests.

Social Media: Why is it a resource?

Social media includes a diverse range of interactive user-generated online activity. In contrast to traditional media, users of social media actively create and distribute content rather than merely consume it. Popular social media platforms include Social Networking websites (Facebook, LinkedIn, MySpace), Blogs/Microblogs (Twitter, Tumblr), and Video/Picture sites (YouTube, Instagram).

In the context of proxy fights, it is important to note that social media content:

  • can easily be created by users at little to no cost;
  • can simultaneously be shared by multiple users; and
  • allows for interactive unfiltered feedback on a real-time basis.

Social media has already been used to announce and influence corporate governance disputes. Consider the following examples:

Grassroots activism: Yahoo Inc. and "Plan B"

An early example of social media being harnessed to advocate for corporate governance change was a 2007 YouTube video posted by a retail investor of Yahoo Inc. called "Plan B". The amateur video, coupled with a blog, promoted a message of change to other retail shareholders. It attracted the attention of non-institutional and institutional investors alike and, arguably, influenced events leading to Yahoo's then CEO stepping down.3

Shining the spotlight on issues: the Icahn/Apple and Icahn/eBay sagas

In August, 2013, Carl Icahn tweeted his beliefs that Apple was undervalued and that it should implement a larger share buyback than was currently planned. Icahn's tweets, by themselves, probably did not sway Apple's repurchase of an astounding $45 billion of its stock in fiscal 2014.4 But they undoubtedly generated signification media coverage. Within an hour of his first two tweets, Apple's market value jumped by about $17 billion.5

In early 2014, Icahn campaigned for eBay to spinoff PayPal. He tweeted updates on his position and links to longer open letters to eBay shareholders. Some of his tweets cut deep. For instance, on March 10, 2014, Icahn tweeted, "[w]e believe based on evidence we have newly uncovered that Donahoe's incompetence cost eBay holders over 4 billion". In April, 2014, a tweet announced that Icahn and eBay reached an agreement to avoid a proxy contest. As a result of the agreement, Icahn nominated two members to eBay's board and he dropped (publically at least) his call for a PayPal spinoff. Then on September 30, 2014, eBay announced plans to spinoff PayPal.

Fighting back: Ackman vs. Herbalife

In December 2012, after shorting Herbalife, Bill Ackman publicly alleged that it was a "pyramid scheme". Federal regulators are investigating this allegation. Herbalife fought back using social media. In January 2013, it advertised on Twitter such that a search for Bill Ackman's name directed users to a YouTube video promoting Herbalife. Herbalife also apparently registered Bill Ackman domain names for a campaign against him.6

A Canadian example: International Datacasting Corporation

In 2012, a director of International Datacasting Corporation ("IDC"), a TSX listed company, took to Twitter and Tumblr to gain support for a dissident slate. The tweets ranged in tone from neutral news to provocative punches. For example the following tweets were made during the contest:

  • "International Datacasting Proxy Battle Heats up; Adamou responds | Cantech Letter..."7
  • "RT @idc_positive: Your Choice In Pictures: There's only one Positive Choice #BlueProxy #IDCpositive $IDC.CA #IDC"8
  • RT @idc_positive: International Datacasting Limits Access to Shareholder Information #IDCpositive9

In response, IDC issued a news release cautioning shareholders about "under-handed tactics" that were being promulgated through the dissident's social media accounts.10 Although the dissidents were defeated, their use of social media in this Canadian proxy contest was novel.

Strategic issues to consider

Will social media influence opinion?

Social media's influence in a proxy contest may be limited by the nature of the issuer's shareholder base. Skeptics have argued that social media may not be effective in swaying sophisticated institutional investors who will vote, for the most part, based on recommendations from proxy advisory firms. This criticism is somewhat valid. However, it ignores two new developments.

First, as noted above, in the U.S., social media is increasingly being employed to achieve objectives prior to and during proxy contests — with some success.

Second, social media is increasingly driving investment decisions. A 2014 survey11 reported that 70% of nearly 500 institutional investors and sell-side analysts surveyed said that digital media will have a greater impact in future investment recommendations and decisions. Additionally, there are automated strategies that trade on market sentiment captured from social media.

Will control over the message be lost?

Another strategic concern when using social media in proxy contests is that control over the message may be lost. A party weighing this concern must balance the advantage of shaping the discussion as opposed to doing nothing.

Using social media for corporate governance matters is still considered novel. We believe this novelty will wear thin in the upcoming proxy seasons. Hardly a bold prediction. In a recent survey of senior corporate executives and activist investors, 88% of U.S. respondents expect social media increasingly to be used to promote activist campaigns.12

Our next post in this series will review the legal challenges of using social media from the perspective of the company and the activist.


1 Number of social network users worldwide from 2010 to 2018,


3 See; Richard Levick, The Floodgates Are Open: Shareholder Activists Intensify Social Media Utilization,; Remus Valosn, Social Media and Shareholder Activism, Edinburgh Centre For Commercial Law Blog,








11; See also


To view original article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.