Every year, there are hundreds of millions of dollars in unclaimed assets in Canada due to lost shareholders.
There are several ways these assets can become "lost". Shareholders move and don't think to contact the transfer agent to update their address. A shareholder passes away without including their investments as part of the estate, and family members aren't aware of these holdings. There is a merger or acquisition, reverse stock split or other corporate action, or an insurance company that has demutualized, and individuals neglect to exchange their old certificates and/or submit their claim for the new shares or cash entitlements.
Locating lost holders
An ASSET REUNIFICATION® program is designed to search and locate holders of lost assets to reunite them with their rightful cash or share entitlements. Programs typically run for 18 months with mailings every 10 weeks but can go on longer, depending on the situation.
Under provincial Unclaimed Property laws, companies or their agents who are debtors or holders of unclaimed property may have an obligation to remit the qualifying unclaimed property to provincial administrators. There are benefits to companies and their shareholders to take measures to locate lost shareholders and reunite them with their unclaimed property. With an increasing business focus on corporate social responsibility in companies of all sizes and across all industries, organizations recognize the need to consider environmental, social and governance (ESG) factors in their management processes and decision-making.
Success today is as much about maintaining a solid reputation and demonstrating accountability as it is about delivering excellent products and services, and an exceptional customer experience. Here is why reuniting your investors with their unclaimed property is good for business.
1. Good Corporate Governance
The governance aspect of ESG deals with areas such as a company's leadership, executive pay, audits, internal controls, and shareholder rights.1 Company finances are often under scrutiny, especially when there are news stories about big executive bonuses or high dividends while there are lay-offs or cutbacks.
In some provinces there is a heightened focus on corporate governance as it relates to unclaimed property remittance. In Québec, for example, companies must demonstrate to Revenu Québec that they are taking all the necessary steps to comply with the Act and regulation, including remitting the cash or share entitlements to the provincial government should the shareholder remain lost and the unclaimed property meet the remittance requirements. While implementing a strategy and framework to effectively address unclaimed property requirements shows good corporate governance, many companies don’t have the resources — either financial or personnel — to take on this task internally.
2. Solid Investor Relations
"The IR department's largest role is its interactions with investment analysts who provide public opinion on the company as an investment opportunity."2 They act as a liaison between the board and executive team, and investors and shareholders, monitoring the markets and providing important feedback about the perception of the company to important stakeholders. The act of reuniting lost holders with their rightful assets can be viewed as a positive step by the company, and one that would bode well for their image and reputation in the market.
3. Goodwill with Shareholders
The importance of ESG has resulted in shareholders taking a step back to review their priorities. "For many shareholders, it is not enough for a company to merely be profitable; it also needs to demonstrate good corporate citizenship through environmental awareness, ethical behavior, and sound corporate governance practices."3
An ASSET REUNIFICATION® program is a socially responsible initiative that can go a long way to promoting shareholder goodwill. And it's just the right thing to do.
Prepare to reunite shareholders with their assets
If your company is involved in a corporate action, whether an M&A event or reorganization, consider an ASSET REUNIFICATION® program as part of your overall shareholder integration strategy. This is a proactive measure to increase participation rates and ensure all shareholder information is up-to-date.
If you have shareholders from predecessor companies or shareholders whose whereabouts are unknown, contact Computershare l Georgeson. We specialize in ASSET REUNIFICATION® program services with our unmatched ability to actively search and locate lost shareholders. To learn more about launching your program, contact Jason Spasaro, Assistant Vice President, Business Development at Jason.Spasaro@Computershare.com.
1
Environmental Social and Governance (ESG) Criteria
2
Investor Relations (IR)
3
Corporate Governance Definition
The material contained herein is provided for general informational purposes only and does not constitute legal or other professional advice or opinion. Computershare does not warrant or guarantee the accuracy or completeness of the material contained herein and such material should not be relied upon. "Computershare" refers to Computershare Canada Inc. and its affiliates.
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