TELUS claims that its commitment to “good corporate governance” is one of the driving forces behind its proposed share collapse. We are not opposed to a share collapse, provided there is a fair exchange ratio that would treat ALL shareholders fairly. But TELUS’ proposal ignores the fact that voting shares are historically – and fundamentally – more valuable than non-voting shares. Despite shareholder concerns and repeated attempts to engage TELUS to discuss conversion options and an exchange ratio that would treat ALL shareholders fairly, TELUS’ board and management have stubbornly refused to consider anything beyond the flawed and oppressive one-for-one exchange. How could such complete disregard for an entire class of shareholders possibly be considered “good corporate governance”?

The directors of a publicly-traded company have an overriding duty to protect the interests of ALL shareholders and to ensure that any changes that implemented are done so in a fair and equitable manner. The TELUS board has failed in that regard. It did not establish a process whereby the interests of each class would be fully and independently considered and never obtained an independent fairness opinion for the voting class. Even in this second attempt at pushing through the same oppressive proposal, they have not even attempted to provide a fairness opinion for the voting shareholders.

What could possibly be driving TELUS’ fixed mindset and unwillingness to fairly compensate voting shareholders in its proposed share collapse?

One possible explanation is a conflict of interest, as noted by Bernard Black, Professor of Law at Northwestern University’s Law School and Kellogg School of Management. 2 The majority of TELUS’ management team and board’s holdings are tied to the non-voting shares. As a group, the management team and board hold approximately $150 million more in non-voting shares than voting shares and stand to make a windfall – which Mason estimates at more than $4 million – at the expense of voting shareholders if this proposal is approved.


Shareholder voting is the primary means by which shareholders can exercise their basic rights of ownership and influence the direction of a company. It is a fundamental concept that lies at the very core of our corporate system and is absolutely essential for good corporate governance. But, rather than respecting the rights afforded to shareholders by allowing the vote to play out fairly, TELUS is attempting to tip the scales in its favor by engaging in “vote buying”.

TELUS is paying dealer solicitation fees for votes by retail holders TELUS voting shares in favor of the proposal. Vote buying – which is illegal in the U.S. and other countries around the world – flies in the face of the fundamental function of a shareholder vote and shows TELUS’ complete disregard for its voting shareholders and their rights.

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