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  • 20 Aug 2012 5:30 PM | Anonymous member (Administrator)

    Toronto, Ontario – August 20, 2012    The Canadian Coalition for Good Governance is pleased to announce the recipients of the 2012 Governance Gavel Awards.  The awards were presented at the 14th Annual Corporate Governance Conference hosted by the Canadian Society of Corporate Secretaries earlier today in Vancouver.

    Best Disclosure of Board Governance Practices and Director Qualifications      
    Suncor Energy Inc.

    Best Disclosure of Approach to Executive Compensation 
    Canadian National Railway Company

    Best Disclosure of Governance Practices and Approach to Executive Compensation by a Small or Mid-Sized Issuer
    MacDonald, Dettwiler and Associates Ltd.


    CCGG Governance Gavel Awards were created in 2005 to recognize excellence in shareholder communications by issuers through their annual proxy circulars focusing on executive compensation disclosure and the communication of director qualifications and board practices.  Please contact Tony D'Onofrio at or at 416-363-8253 for more information.
  • 07 May 2012 3:18 PM | Anonymous member (Administrator)

    It has long been an open secret that Canada’s shareholder voting system is broken, but until it caused a mess at a name-brand company, nobody would get around to fixing it.

    Well, it might just happen. Two of Canada’s biggest corporations face contested votes in coming days: Telus Corp. on Wednesday and Canadian Pacific Railway Ltd. on May 17. Telus wants to collapse its dual-share structure, but a hedge fund is challenging the plan. CP is trying to fend off activist investor Bill Ackman, who wants to replace a good chunk of the board.

    (Read More)
  • 28 Oct 2011 3:16 PM | Anonymous member (Administrator)

    The Summit was an unprecedented gathering of all the key stakeholders who have a role to play in the regulation and administration of the processes by which the holders of shares of Canadian public companies vote their shares at shareholder meetings.

    The current processes do not adequately serve the interests of participants in the Canadian capital markets. The reasons for this are many and varied, and are in large measure due to the unprecedented growth in the volume and complexity of transactions in the capital markets in the recent past.

    The Summit process, which is continuing, is a unique and unprecedented opportunity for all stakeholders to gather and share vital information with the objective of improving the voting process to ensure that it can serve appropriately as regulators and public interest groups place increasing importance on shareholder democracy.

    The Society has taken upon itself the role of catalyst for the Summit as our members as corporate secretaries and governance professionals witness the dysfunction of the current system first hand and we see the companies we serve and their shareholders suffer the consequences.

    What we have learned in organizing the Summit to date is that the simple act of getting the stakeholders in each other’s presence, and sharing information that is presently trapped in silos, affords insights that will allow all the stakeholders to learn how they are able to contribute to improving the existing processes.

    The Summit process presents an opportunity to the participants, as Canadians, of developing an efficient modern shareholder democracy process that will be a significant competitive advantage for Canadian capital markets and serve as an example to US, European and Asian markets.

    In the course of the Summit, the participants thanked the Society for assuming the leadership role on these issues and all the key stakeholders confirmed their belief that the issues raised by the Summit process were vital issues and that the CSCS should continue to lead the stakeholders towards the development of a renewed, efficient and transparent shareholder rights process.

    Here are the interesting things I picked up in my notes. Some are similar to Sylvia's observations. I missed the US panel and some of the international panel because of interviews I was giving to the Canadian media.

    • Danielle Larivière of Jarislowsky Fraser noted that while wrap accounts are entitled to vote, the current systems for data exchange lack fields for voting with the result perhaps 20% of the vote is not coming through. She also pointed out that the complexity and lack of transparency in the system is such that it can take a number of annual meeting cycles of an issuer before the voting problems become evident to the investment manager, and thereafter another cycle or two to address;
    • She further noted that in theory the time required to recall shares before the record date so that they can be voted is T+3, but in practice it takes longer than that, futher complicated the recall process;
    • Paul Schneider of Ontario Teachers noted that the lack of transparency is where all the confidence erodes, and that in an era where the shareholder vote has become a very important issue, and important for the issuers as well, since there is more riding the votes with Say on Pay, and Majority Voting, it is critical for the system to become transparent.
    • He added that the chief issue is the lack of end to end confirmation. ‘We only see the vote going to Broadridge, then we see the voting results and we have no way to know if the vote actually counted, we always have a nagging question whether the vote counted and we shouldn’t have to rely only on hope.’
    • Jason Milne of Phillips Hager & North noted that there were several processes in place for beneficial shareholders to gain the right to attend and participate fully at meetings, but that in practice none of those processes are capable of actually working.
    • He added that shareholder confidence in the proxy voting system is essential to the functioning of the capital markets.
    • Danielle Larivière added that ‘we want the same confidence for votes that we get for dividends and corporate actions and currently there are no checks and balances and no audit assurance’.
    • Bill Brolly of Computershare noted the need to improve business processes and data interchange among participants in the shareholder voting system. He noted that faxes are still in use to convey data related to voting.
    • He added that he thought that the continued existence of the OBO / NOBO distinction was inconsistent with resolving the business process issues.
    • Benjamin Silver asked whether the rumoured practice of so-called ‘restricted proxies’ by which dealers upon request assign voting rights to beneficial shareholders who acquired shares after the record date in fact existed and Suzy Monteiro of Phoenix Capital Partners, a proxy solicitor confirmed that it did.
    • Fran Daly of CDS suggested that a central reconciliation hub might be an ingredient in improving the voting processes.
    • David Masse suggested that a single shareholder dashboard where all shareholders might vote their shares and drill down to the underlying disclosure information would be desirable.

    As for next steps, we have are reconvening the organizing committee next week to arrive at a consensus, but some things seem fairly obvious:

    • It became clear that we were missing a panel of investment managers, managed funds, etc., as well as a panel of broker/dealers and retail shareholders. The retail shareholder view, in my opinion, is represented by the securities commissions. Our attempts to get FAIR to participated were not successful. I think that as long as we get the other two groups we’ll have completed the “show & tell” step that was the objective of year 1 of the Summit. RBC Dexia, Canada’s largest custodian, has offered us its conference facilities and some grunt work to organize the two remaining panels in the coming months;
    • The conference materials, including the rapporteur’s notes and the transcript of the sessions need to be posted online (that work is well advanced and is continuing) and organized.
    • A timeline with achievable milestones needs to be developed to carry the project forward;
    • The next instalment of the Summit, in a year’s time, will focus on the issues from a process perspective, looking for paths that can be taken to arrive at an efficient system for shareholder democracy. Features of a transparent efficient systems that will be explored will likely include:
      • A complete revamp of the business processes for sharing information among the transfer agents, the depository, the proxy agent, custodians, brokers, institutions, voting agents, and ultimately retail shareholders, coupled with information processing standards to permit the flow of information in a consistent way among the players;
      • A unified shareholder information and voting dashboard allowing all shareholders to vote in the same way with the same ability to drill down into the supporting documentation;
      • Processes that lend themselves to reconciliation and verification to support third party audit and quality assurance so that the voting process is transparent and effective;
    •  Proposals for regulatory reform to table at the next Summit, including
      • Changes to the corporation laws to allow issuers to treat registered and beneficial shareholders equally;
      • Changes to the securities laws and regulations, and to corporation laws to all the gap between the record date and the meeting date to be all but eliminated, and reduced to M-3, with the proxy cutoff and voting record date possibly being the same day;
      • Changes to the securities laws and regulations to provide standards and structure for the role of the proxy agent.

    David Masse
    Chairman of the Board
    Canadian Society of Corporate Secretaries
    (514) 841-3277

  • 07 Sep 2011 3:12 PM | Anonymous member (Administrator)

    The focus on all aspects of corporate governance has been steadily increasing.  
    The initial focus was on the role of directors in ensuring that the business of the corporation is managed to maximize value for shareholders. As enterprises failed earlier in the decade as a result of mismanagement, the focus increased sharply, and the burden of regulation and expectations related to best corporate governance practices increased proportionately.

    It is the natural course of that progression to focus on the role of the shareholder in selecting, electing, evaluating and eventually replacing the directors.

    A number of important initiatives along those lines are gaining traction in all jurisdictions. Say-on-pay and majority voting are two of the most important of those initiatives. Institutional shareholders and their advisors are paying much more attention to how they vote their shares in director elections.

    This is good because it has real potential to motivate directors to pay closer attention to their role, and to how their decisions are perceived and evaluated by shareholders. Social pressure resulting from votes withheld from directors, particularly where the directors’ re-election might be in doubt, is strong medicine indeed.

    The amalgam of these measures is what is generally referred to as “shareholder democracy”.

    For a democracy to function well, the people must be able to vote. This begs the question whether shareholders have the right to vote. The answer at first blush for holders of common shares is self-evident: of course shareholders have the right to vote.

    The real nub of truth for director elections is much more nuanced and quite a bit more problematic to arrive at however.

    First off, not all shareholders have the right to vote. Some shares may not have voting rights. But even for typical common shares that do have voting rights, not all holders of those shares are treated equally. Only registered shareholders are contemplated as having the full exercise of the rights that are attached to the shares they hold. Shareholders whose name is not entered on the register of shares are not shareholders within the meaning of most corporation laws, and those holders have no standing to vote.

    This is increasingly problematic since most shareholders are not registered holders. Their shares are held on their behalf by others. In the first case, the actual registered shareholder is the depository. In the US it’s the Depository Trust Company, in Canada it’s the Canadian Depository for Securities. The depositories hold the shares on behalf or brokers and other intermediaries. As often happens, there can be a maze of intermediaries between the holder and the registered share position. Holders whose shares are held this way are “beneficial shareholders”.

    The financial rights attached to shares are well administered in the current system. This means that registered and beneficial shareholders alike receive the dividends and proceeds of transactions to which they are entitled quickly and reliably.

    It is not necessarily so with the right to vote. Whereas the incentives of all market participants are clear and well-aligned with respect to financial rights, voting rights haven’t benefitted from the same focus. The incentives are sometimes not as well perceived or appreciated, with the result that the alignment among participants that would be required to allow votes to be delivered and counted as easily and efficiently as dividends is lacking.

    The result is that the shareholder voting system is in large measure dysfunctional.

    That dysfunction is some way or other sometimes results in the effective disenfranchisement of beneficial shareholders. The impact is not merely felt by small retail shareholders as one might expect. Large institutional shareholders fall victim to the dysfunction as well.

    The problems are exacerbated by the complexity of the capital markets, with the practices of share lending and short selling compounding the difficulty of determining who is truly entitled to cast the votes associated with a given share. Because many shareholders simply do not vote, it can be difficult to determine instances of over-voting, which is where more than one holder votes the same share.

    There is a growing acknowledgement in the US and Canada that the processes of shareholder democracy need attention, particularly since both regulators and institutional shareholders are placing substantial wagers on shareholder votes as an incentive for better and more robust corporate governance.

    Those that have sought to map the processes by which shares are voted have drawn flow charts of daunting complexity. A symptom of that complexity is that each of the stakeholders in the voting process only sees the narrow slice of the overall voting pie that is closest to them. This is true of shareholders, issuers, transfer agents, proxy agents, intermediaries, depositories, custodians, proxy solicitors, brokers, regulators, and governance professionals.

    Each stakeholder has a vested interest in the way the current processes work. In some ways they perceive themselves to be invested in the dysfunction. In some cases this may be true. In other cases the complexity of the system makes it difficult for a given stakeholder to perceive where their best interests truly lie, and they may be reluctant to consider change that they might otherwise embrace if they had a better understanding of the whole pie.

    The Canadian Society of Corporate Secretaries represents one of those stakeholders: corporate secretaries and governance professionals. In many ways we are the professionals closest to the front lines.

    CSCS believes that a necessary first step in transforming the processes of shareholder democracy to make them suitably efficient and reliable, is for all stakeholders to gain a better understanding of the whole pie. The multiplicity of parties and the very different worlds in which they operate have to date impeded gathering and sharing the information that is vital to that understanding

    The Canadian Society of Corporate Secretaries has decided to become the catalyst for that vital first step.

    CSCS is hosting an unprecedented gathering of the key stakeholders in the Canadian capital markets on October 24 and 25, 2011 in Toronto. The two-day summit conference will assemble all stakeholders in moderated expert panels. Participants will be strongly encouraged to submit papers to the Summit that set out the processes that they administer along with an evaluation of current outcomes, the strengths and weaknesses of the processes, and the opportunities for improvements they feel exist.

    As part of the Summit, there will be expert panels focusing on the proxy voting processes in other markets including the US, Europe, and Asia.

    At the conclusion of the Summit, CSCS hopes to have created an unparalleled repository of information that can serve as a basis for understanding how the current system works, identifying the points of failure, and proposing changes that serve to level the playing field for all shareholders, registered and beneficial alike. We will be working with noted academics from prominent Canadian universities to ensure that the documentation from the Summit, including video and transcripts of the sessions are assembled as a cohesive work to facilitate subsequent reference.

    Information concerning the Summit, including the preliminary program, registration and sponsorship is available on CSCS’ website at

    David Masse
    Chairman of the Board
    Canadian Society of Corporate Secretaries
    (514) 841-3277

  • 26 May 2011 3:11 PM | Anonymous member (Administrator)

    Effective reform proposals that ensure equality, fairness, simplicity and clarity for all shareholders of Canadian companies

    This CSCS policy initiative explores the more important challenges that beneficial ownership of securities presents in the Canadian market.  The CSCS White Paper on Shareholder Communication available for download on this page proposes specific reforms to the current rules including proposals to amend the existing corporation statutes and the securities rules relating to shareholder communications.  These proposals, when they are adopted, will eliminate the most significant disparities that currently exist between beneficial and registered ownership as well as the challenges that issuers regularly face in their attempts to treat all their holders with an even and fair hand.

    Materials related to the CSCS Shareholder Communication initiative

    CSCS White Paper on Shareholder Communication

  • 26 May 2011 3:08 PM | Anonymous member (Administrator)

    The OSC recently established a NI 54-101 Advisory Committee and Notice-and-Access Technical Working Group, which met for the first time in January to discuss developing a model for delivery of meeting materials through posting on a website, with the goal of implementing notice-and-access on a trial basis this coming proxy season.  

    The working group consists of representatives from CSCS, CCGG, CIRI, Broadridge, STAC, the dealer community and the proxy solicitation firms. The discussion at this first meeting focused on the following areas:

    Key mandate of the group to include:

    • Reducing delivery costs and improving timeliness of delivery by permitting notice-and-access delivery on the basis of implied consent
    • Minimizing risks that beneficial owners will not receive materials and vote in a timely fashion by identifying what, if any, minimum standards should apply to the delivery and voting processes used by issuers, intermediaries and their service providers
    • Giving priority to technology (electronic delivery of materials) and voting reporting and verification

    The following were raised as key issues (many of these will be the starting point for the work of the committee going forward):

    • issuer concerns about control of costs in the system and paying for services they don’t need
    • equal treatment of all shareholders and ability of shareholders to get information they want/need (or don’t want/need or think they don’t want/need, i.e., OBO’s not wanting mailings)
    • responsibilities that shareholders have as investors and “owners” a company (related to distribution of materials) and previous point
    • practices around use of proxies, omnibus proxies, voting information forms
    • transparency of who holds shares
    • transparency of voting process and results to ensure integrity of outcomes
    • concerns re: early search costs for small issuers (related to controlling costs)

    The Timeline for the outcome of the committee’s work is targeted for the summer. Further updates will be provided along the way by CSCS.

  • 20 Apr 2011 11:34 AM | Anonymous member (Administrator)

    On December 19th, the Canadian Securities Administrators (CSA) submitted a Proposed Repeal and Replacement of National Policy 58-201 Corporate Governance Guidelines, National Instrument 58-101 Disclosure of Corporate Governance Practices, and National Instrument 52-110 Audit Committees and Companion Policy 52-110CP Audit Committees. These proposed changes were posted for a comment period of 120 days, that expired on April 20th.

    The proposed new regime’s key features include:

    • A principles-based policy that moves away from the current ‘comply and explain model’
    • A new set of disclosure requirements which would apply to both venture and non-venture issuers
    • A broader scope of principles to encourage issuers to develop their own corporate governance and disclosure practices
    • A principles-based approach to the concept and definition of independence

    The Canadian Society of Corporate Secretaries (CSCS) ensured that our members were consulted and their views taken into consideration in this comment process.

    To that end we held a series of cross-country meetings during the months of March and April in Montreal, Toronto, Edmonton, Calgary and Vancouver, to obtain our members’ views on the impact of the proposed changes.  We invited representatives from the AMF, the OSC, the ASC, and the BCSC to provide detailed presentations on the proposed regime.  In all close to 200 participants attended these sessions, and their views were included in our comment letter which was submitted to the CSA in response to their request for comments.

    Click here to view the CSCS comment letter to the CSA.

    Click here to view Proposed New Governance Rules

  • 31 Mar 2011 11:06 AM | Anonymous member (Administrator)

    In conjunction with the changes proposed to NI 54-101 in 2010, CSCS surveyed our members to get their views on proxy voting system issues. Here we provide an overview of the key comments and concerns of CSCS members.

    CSCS members overwhelming agree that there are significant issues in the Canadian proxy voting system that must be addressed through revised regulation, including: overall complexity of the system; Difficulty communicating directly with shareholders; and inability to ensure that the votes that should count are the votes that do count

    CSCS has recommended that the OSC take an active role with the Canadian Securities Administrators and the regulators responsible for related corporate legislation to review the proxy voting system with the intention of proposing new regulations aimed at improving and simplifying the mechanisms and processes.

    CSCS also asked our members for their views on the treatment of beneficial and registered owners. The members overwhelmingly support equal treatment of both beneficial and registered owners.

    Accordingly, we strongly recommended that the OSC, together with the CSA and other securities and corporate regulators in Canada review existing legislation to address the current imbalances and ensure equality, fairness, simplicity and clarity for all stakeholders including shareholders, issuers, market professionals, and their agents, including transfer agents and proxy agents.

    We have deliberately chosen to address only the issue of the proxy voting system as we believe it is the most important issue to be addressed by regulators on behalf of shareholders and corporate Canada.

    To view the full response letter from CSCS to the OSC, click here.

  • 17 Feb 2011 11:03 AM | Anonymous member (Administrator)

    The Canadian Society of Corporate Secretaries (CSCS) engages with Canadian securities regulators to ensure our members’ interests are represented. We are now responding on behalf of our members to the request for comments on the proposed revisions to 51-102F6 – Statement of Executive Compensation.

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