Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis) have both released updates to their Canadian proxy voting recommendation guidelines for the 2018 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 Independence. ISS has updated its definitions relating to director independence. Previously, ISS categorized each director as an Inside Executive Director, Affiliated Outside Director or Independent Director. The new categories are Executive Director, Non-Independent, Non-Executive Director (including former CEOs, controlling shareholders, Non-CEO executives, relatives of executives and persons with professional/financial relationships, among other things) or Independent Director.
Board Gender Diversity. Beginning February 2019, ISS will generally recommend withholding votes for the chair of the nominating committee, or board chair if no nominating committee chair, where a company has not disclosed a formal written gender diversity policy and has no female directors. ISS indicates that a written policy should include measurable goals or targets and clear commitments to increasing gender diversity within a reasonable period of time. The ISS Updates also state that boilerplate or contradictory language may result in withhold recommendations. The ISS policy will apply to all TSX companies, except companies first listed or graduated from the TSXV within two fiscal years or companies with four or fewer directors.
A recent case in Manitoba has explored certain issues relating to the use of proxies within the context of a limited partnership. The case, 177061 Canada Ltd. et al. v. 5771723 Manitoba Ltd. et al., 2016 MBQB 40, discusses two points of interests relating to proxies in a limited partnership setting (and, by logical extension, a partnership setting): (1) whether, under Manitoba law, a unit holder in a limited partnership can give to another person an irrevocable proxy to vote, which extends beyond a single meeting or adjourned meeting, and (2) if so, whether such irrevocable proxy can be revoked.