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Against the backdrop of the COVID-19 pandemic and the novel challenges with which public companies around the world have been faced, Glass Lewis & Co. (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”), two established proxy advisory firms, have released updates in connection with how their voting policies will be applied in the course of the 2020 proxy season. The central themes from both advisors are that the COVID-19 pandemic is creating exceptional and difficult circumstances for Boards to navigate, and that the firms will have an increased flexibility in their approach to proxy contest reviews, with an emphasis on the quality of companies’ decision-making, disclosure and reasoning in respect of any changes to governance, compensation and capital structure.…

Continue Reading Proxy Voting Guidelines in the COVID-19 Context

Since it costs a lot to win, and even more to lose,

You and me bound to spend some time wondering what to choose.

Deal – The Grateful Dead

IIROC recently published guidance regarding managing conflicts of interest arising from soliciting dealer arrangements. The guidance elaborates on existing conflict of interest rules in the context of takeover bids, plans of arrangement, proxy contests and other securities transactions involving various types of solicitation fees.…

Continue Reading IIROC Provides Guidance on Soliciting Dealer Arrangements

For many family businesses, control of long-term direction and management of the family corporation are key issues, particularly during times of growth or periods of succession. The Institute for Governance of Private and Public Organizations (“IGOPP”) recently published a new policy paper that should be of interest to family businesses and their advisors in planning the capital structure for their enterprises: The Case for Dual-Class of Shares, Policy Paper No. 11 (2019). The paper revisits[1] the state of dual-class public corporations in Canada, emphasizes their value to entrepreneurs, family businesses and Canadian society as a whole and makes a number of structuring recommendations, which are outlined below.
Continue Reading It Stays in the Family – Dual Voting Share Structures for Family Businesses

Recently, a group of prominent executives released an open letter and document known as Commonsense Principles 2.0. Signatories include Mark Machin of the Canada Pension Plan Investment Board and Warren Buffett of Berkshire Hathaway. The purpose of the letter and the principles is to encourage companies to embrace a long-term view and enhance trust…

It’s fall, which means it’s time for the annual Canadian Securities Administrators staff review of disclosure made by public companies under Form 58-101F1 Corporate Governance Disclosure, particularly as it relates to gender diversity among corporate leadership. The 2018 review is the fourth such annual review, with previous reviews having been published in 2015, 2016, and 2017.

Here are the five things you should know about the 2018 staff review. For more details, access the full publication of CSA Multilateral Staff Notice 58-310 Report on Fourth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions. Publication of the review’s full dataset follows later in the fall. In this post, the term “public company” refers to a reporting issuer captured in the 2018 staff review.[1]…

Continue Reading 5 things you should know about the latest CSA staff review on gender diversity

Bill C-25 is a federal government bill that would, if adopted, introduce sweeping changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act (CBCA). Like the proverbial tortoise, the bill has moved unhurriedly through the legislative process, in part due to several changes made to the bill since our previous post that discussed Bill C-25. The bill’s enactment would be just one of many “finish lines”, and it may take several years for all provisions of the bill and accompanying regulations to be drafted and brought into force. This post will canvass the amendments made so far to Bill C-25, with a focus on the proposed gender diversity disclosure framework, and will show a path forward to its eventual coming into force.
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Continue Reading Bill C-25 and its Amendments to the CBCA: A Legislative Tortoise Approaches a Finish Line

As noted in the Globe and Mail’s recent article, “In Canada’s boardrooms, activist investors are striking out” (subscription to the Globe and Mail required), Canadian listed public companies have continued to have success against activist investors. In fact, since January 1, 2015, Canadian listed issuers have a perfect record against “professional” activists in formal proxy contests, having won all six such contests to make changes to the board which were initiated by hedge funds or institutional investors. This success may be driven, at least in part, by issuers’ increased emphasis on advance preparation, including shareholder engagement. If issuers are more attuned to the views of their shareholders, it stands to reason that they will be in a better position to assess the likelihood of successfully defending against an activist in a formal proxy contest and pre-emptively settle those situations that they do not believe they can win. This explanation, while compelling, may be incomplete. With that in mind, I offer the following five observations based on a review of the public record of unsuccessful contests recently initiated by “professional” activists.
Continue Reading Canadian Issuers Continue To Have Success Against Activist Investors