Timely Disclosure

Timely Disclosure

Updates and Commentary on Current issues in M&A, Corporate Finance and Capital Markets

Category Archives: Corporate Governance

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Lessons from Trump’s Victory: 10 Questions that every target of shareholder activism should be asking itself

Posted in Contested Situations, Corporate Governance
In light of Donald Trump’s unorthodox campaign and unexpected victory, it may be worthwhile to consider whether there are any strategy lessons for those engaged in shareholder activism.  After all, a proxy contest is essentially a form of political campaign. Is angry rhetoric on the part of the activist more galvanizing than reasoned argument? In… Continue Reading

Canadian Issuers Continue To Have Success Against Activist Investors

Posted in Corporate Governance, Directors & Officers, Elections of Directors, Proxy Voting
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,… Continue Reading

Bill C-25: sweeping changes to corporate governance

Posted in Corporate Governance, Directors & Officers, Elections of Directors, Stock Exchanges
Bill C-25: Major changes proposed to director elections and other governance matters for CBCA reporting issuers On September 28, 2016, the federal Minister of Innovation, Science and Economic Development introduced Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. Bill… Continue Reading

Is There Method in Seagate’s Madness in Inviting an Activist Wolf into the Fold?

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions
Seagate Technology’s Unusual Alliance with ValueAct Capital: Is There Method in Seagate’s Madness in Inviting an Activist Wolf into the Fold? Last month, Seagate Technology plc, an $11 billion company in the data-storage business, announced a secondary block trade in which it facilitated the transfer of roughly 9.5 million ordinary shares, representing an approximate 4% stake in… Continue Reading

Results of Gender Diversity and Term Limit Disclosure Review Released

Posted in Continuous & Timely Disclosure, Corporate Governance, Securities Regulatory Authorities
Securities Regulatory Authorities Release Results of Gender Diversity and Term Limit Disclosure Review Securities regulatory authorities in Ontario and nine other provinces and territories of Canada published CSA Multilateral Staff Notice 58-308 Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices on September… Continue Reading

Hemostemix Proxy Contest: Will Dissidents Succeed in Making a Clean Sweep of the Boardroom?

Posted in Corporate Governance, Directors & Officers, Proxy Voting
On August 22, 2016, a group of shareholders commenced a proxy contest to change the entire board of Hemostemix Inc. (Hemostemix), a widely-held, micro cap, clinical-stage biotechnology company (TSXV:HEM, OTCQX:HMTXF). Hemostemix’s business activities focus on the development and planned future commercialization of ACP-01, a proprietary, blood-derived cell product designed to treat critical limb ischemia, a… Continue Reading

The AMF Decides Not to Offer Financial Compensation to Whistleblowers

Posted in Corporate Governance, Securities Regulatory Authorities
On February 18, 2016, the Autorité des marchés financiers (AMF) announced that it will not offer financial rewards to whistleblowers who report violations of the laws administered by the AMF. This decision follows careful analysis of the measures implemented by the regulatory organizations of other jurisdictions. The AMF determined that financial rewards were not an… Continue Reading

Market Intelligence? The Limits of Market Custom and Why Market Practice May not be Best Practice

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions
The views expressed in this post, as in all of my posts, are mine alone and should not be taken to represent the views of Fasken Martineau DuMoulin LLP. “That’s off market.” As a deal lawyer, I’ve heard that phrase more times than I care to remember.  It’s supposed to be a knock-down argument.  We’re… Continue Reading

CSA Propose to Significantly Increase Obligations of Registrants in Canada

Posted in Continuous & Timely Disclosure, Corporate Governance, Securities Regulatory Authorities
The best interest standard for registrants has been on the Canadian Securities Administrators’ (CSA) radar for the past few years. On October 25, 2012, the CSA published CSA Consultation Paper 33-403 The Standard of Conduct for Advisers and Dealers: Exploring the Appropriateness of Introducing a Statutory Best Interest Duty When Advice is Provided to Retail… Continue Reading

Ontario Securities Commission Proposes Whistleblower Program

Posted in Continuous & Timely Disclosure, Corporate Governance, Directors & Officers, Securities Regulatory Authorities
The Ontario Securities Commission (OSC) has proposed OSC Policy 15-601 Whistleblower Program (Policy), which is designed to encourage individuals (whistleblowers) to report to the OSC information regarding serious misconduct related to securities or derivatives, with the prospect of receiving monetary awards in certain circumstances (whistleblower awards). Under the Policy, any whistleblower may submit information regarding… Continue Reading

Clarity for Issuers on Securities Class Actions Issues from Supreme Court of Canada

Posted in Corporate Governance, Securities
On December 4, 2015, the Supreme Court of Canada issued its much-anticipated decisions in CIBC v. Green (“CIBC”), IMAX v. Silver (“IMAX”), and Celestica v. Millwright Regional Council of Ontario Pension Trust Fund (“Celestica”), dismissing the appeals in CIBC and IMAX, in part, and allowing the appeal in Celestica.  Accordingly, only the cases against CIBC… Continue Reading

2016 ISS and Glass Lewis Updates

Posted in Contested Situations, Corporate Governance, Directors & Officers, Proxy Voting, Stock Exchanges
Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis) have both released updates to their Canadian proxy voting recommendation guidelines for the 2016 proxy season. The following summary outlines the significant changes made by ISS (ISS Updates) and Glass Lewis (Glass Lewis Updates) to their respective Canadian proxy advisory guidelines. ISS Definition of… Continue Reading

OSC finds significant deficiencies at exempt market dealers

Posted in Continuous & Timely Disclosure, Corporate Governance, Securities Regulatory Authorities
The Ontario Securities Commission (OSC) published OSC Staff Notice 33-746 (Notice) on September 21, 2015. The Notice focuses on registered firms and individuals directly overseen by the OSC describing the initiatives within the Compliance and Registrant Regulation Branch (CRR), notices published, rule amendments and regulatory action taken as a result of registrant misconduct.   The OSC encourages… Continue Reading

The Canadian Coalition for Good Governance Releases Policy Paper on Proxy Access

Posted in Continuous & Timely Disclosure, Corporate Governance, Directors & Officers, Elections of Directors, Proxy Voting
The Canadian Coalition for Good Governance (CCGG) has released a policy paper entitled “Shareholder Involvement in the Director Nomination Process:  Enhanced Engagement and Proxy Access”. In the policy paper, CCGG refers to “proxy access” as the ability of shareholders to have meaningful input into the director nomination process, whether by being able to influence who… Continue Reading

Responding to the Activist: Compensating the Special Committee

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
As we have noted in our previous post, a special committee appointed to lead a company’s response to an activist can expect to receive a greater degree of public scrutiny, but may take comfort from the fact that the legal standard against which its members will be judged will not change.  While that should provide… Continue Reading

Responding to an activist: While special committee members may face greater public scrutiny, they are not subject to a higher legal standard

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
As we discussed in our previous post, a special committee established in response to an activist’s approach should be comprised of independent board members with the relevant expertise and the time to participate meaningfully. While we have written about some of the benefits to the company of incorporating a special committee process into its response… Continue Reading

Responding to an activist: When appointing a special committee, select the members with care

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
As we discussed in our previous post, when a board finds itself in the crosshairs of an activist, establishing a special committee of unconflicted directors with clear marching orders from the board may allow for more thoughtful decision-making under pressure and lend credibility to the company’s response, particularly where management’s performance is under attack.  Equally… Continue Reading

When responding to an activist, a special committee’s credibility is enhanced by a clear mandate from the board

Posted in Contested Situations, Corporate Governance, Directors & Officers
As we discussed in our previous post, a board faced with the arrival of an activist on the scene can benefit from establishing a special committee of independent directors.  While a quick response time is one of the more obvious benefits of having a small group of directors lead the charge, a committee of unconflicted… Continue Reading

Ontario Business Law Panel releases report recommending changes to key corporate and commercial legislation

Posted in Corporate Finance, Corporate Governance, Directors & Officers, Securities Registration & Registrants
In June 2015, a 13-member panel created by the Minister of Government and Consumer Services (Ontario), known as the Business Law Agenda Stakeholder Panel, released “Business Law Agenda: Priority Findings & Recommendations Report”. The panel reviewed corporate and commercial statutes in Ontario and made recommendations encompassing five key themes: establishing a process to keep corporate… Continue Reading

When an activist comes knocking, consider a special committee to develop a quick and credible response.

Posted in Contested Situations, Corporate Governance, Directors & Officers
Much has been written about how companies can prepare for, and hopefully avoid, a confrontation with an activist shareholder.  While many boards are heeding the call for greater shareholder engagement and oversight of management, each year witnesses a significant number of activist campaigns and proxy contests.  So what is a board to do when its… Continue Reading

Theratechnologies’ victory before the Supreme Court of Canada is a victory for all public corporations

Posted in Continuous & Timely Disclosure, Corporate Governance, Securities
The Supreme Court has handed down a judgment that marks a tremendous victory for Theratechnologies and public corporations in general. This important decision is a reminder of the continuous disclosure requirements of corporations and clearly defines the burden to be met by investors seeking authorization to bring a class action under the secondary market liability… Continue Reading

Study of hostile take-over bids in Canada reveals that a change of control is not inevitable

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
Fasken Martineau’s 2015 Canadian Hostile Take-Over Bid Study sets out the results of a ten-year empirical analysis of hostile take-over bids in Canada. Key findings include: When initiating a public contest for control, a hostile bidder was successful more than half the time; however, a change of control was by no means inevitable, with targets… Continue Reading

Canadian Securities Regulators Publish Revised Notice for Enhanced Early Warning System

Posted in Continuous & Timely Disclosure, Corporate Governance, Securities Regulatory Authorities
On March 14, 2013, the Canadian Securities Administrators (CSA) initially published for comment proposed rules relating to the early warning reporting system (2013 Notice).  The 2013 Notice identified the CSA’s concerns regarding the transparency of disclosure of significant holdings of reporting issuers’ securities under the existing early warning reporting system.  In particular, the 2013 Notice… Continue Reading

The End of Poison Pills?

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions, Securities Regulatory Authorities
The Canadian Securities Regulators (the CSA) have just agreed on major changes that are set to transform the take-over bid regime that has prevailed in Canada during the last three decades.  CSA Notice 62-306 (the CSA Proposal), issued on September 11, 2014, reconciles the competing proposals for poison pill reform initially introduced in March 2013 by the CSA and Autorité des… Continue Reading