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.
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.
On April 8, 2019, the federal government introduced Bill C-97 to implement measures from its spring budget. The bill proposes amendments to many federal statutes, including several important amendments to the Canada Business Corporations Act (CBCA) relevant to both private and public companies. Our summary of the proposed changes is set out below, some of which deal with familiar issues, while others would introduce new requirements for companies.
If the Hillary Clinton email scandal wasn’t a clear enough lesson that one should not conduct “official” work using personal electronic communication tools (be it personal email, texts or other methods), a number of recent court decisions have required executives to produce communications from their personal accounts and devices. Executives and advisors should not assume that communications using methods other than corporate email will somehow be protected or otherwise not find the light of day in the event of a dispute or investigation.
Annual meetings of shareholders of public companies often feature: attendance by a modest number of shareholders, and by the company’s external legal counsel, auditor, investor-relations firm, service providers and other assorted hangers-on; the casting of virtually all votes prior to the meeting by way of proxy; perfunctory reviews of the past fiscal year by the Chief Executive Officer and Chief Financial Officer; and one or two desultory questions from shareholders. In short, annual meetings haven’t evolved in the last 30 years. Excitement arises only if activist shareholders storm the meeting or if unionized employees speak, particularly if a strike is threatened or in progress.
It’s time for public companies to bring their annual meetings into the digital age and to use them as an effective means of communicating with a large number of shareholders and with the investment community in general. A revamped annual meeting may even lead to reduced costs when compared to the traditional model of renting a conference room at a hotel and providing refreshments, as modest as they may be, for shareholders. Canadian corporate law provides a framework which can be used to increase shareholder access to annual meetings and to maximize the impact of annual meetings.
