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