Topic: Corporate Governance

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ISS includes Economic Value Added in its Compensation Reports

Denise Gan (Toronto)By Denise Gan (Toronto) on Posted in Compliance, Corporate Governance, Proxy Battles, Shareholder Activism
Institutional Shareholder Services (ISS) announced earlier this year that, in its 2019 proxy research reports, it will be displaying financial ratios derived from a base measure called Economic Value Added (EVA). The EVA ratios will initially be used for informational purposes only, meaning they will not factor in to say-on-pay voting recommendations or evaluations of … Continue reading

Shareholder Activism Reaches Record Levels

Monica Wong (Toronto)By Monica Wong (Toronto) on Posted in Corporate Governance, Proxy Battles, Shareholder Activism
Activist Insight recently published the sixth edition of its annual report, entitled “The Activist Investing Annual Review 2019” (the “Review”). The Review analyzes recent global shareholder activism trends, forecasts expected developments in 2019, and highlights and compares jurisdictional data. Oh, Canada: Increased Canadian Activism As the Review outlines, 2018 was a notable year in Canada … Continue reading

Share Buybacks & Executive Compensation: Aligning Management’s Incentives

Robert Corbeil (Toronto)Joe BrickerBy Robert Corbeil (Toronto) and Joe Bricker on Posted in Corporate Finance, Corporate Governance, Securities
As we previously discussed, the use of share buybacks has accelerated in recent years, both in Canada and the United States. This has sparked anxious debate over the extent to which buybacks can form part of an effective long-term growth strategy. Particularly in the United States—where buybacks hit a record of more than $1 trillion USD … Continue reading

Addressing Flawed Corporate Culture

Simone Nash (Toronto)By Simone Nash (Toronto) on Posted in Corporate Governance
A glimpse at recent news headlines is telling of a mass social awakening underway. From the #MeToo movement to public reprimand against organizations’ unrealistic sales targets, it is clear that it is becoming increasingly important for companies to foster a positive “corporate culture”.  These scandals, once in the public eye, can have long-lasting damaging effects … Continue reading

Access to Corporate Records Amidst Controversy

Hugo Margoc (Toronto)By Hugo Margoc (Toronto) on Posted in Corporate Governance, Shareholder Activism
The rights of shareholders and directors to access corporate books and records is undisputed, but what about the rights of a former Chief Executive Officer, especially when the termination was contentious? US Jurisprudence: In the United States, a recent decision by the Delaware Court of Chancery dealt with this scenario. In that case, the CEO … Continue reading

The Importance of Corporate Governance in Cannabis Companies

Robert Corbeil (Toronto)By Robert Corbeil (Toronto) on Posted in Corporate Governance
Every year The Globe and Mail’s Report on Business ranks governance of Canada’s corporate boards in the “Board Games.” In the recently published 2018 edition, the boards of directors of 242 companies and trusts in the S&P/TSX index were assessed. The companies are awarded points for various categories, namely, board composition, shareholding and compensation, shareholder … Continue reading

Is Governance Going Green? The Influence of Environmental and Social Issues on Corporate Governance and Investing

Samantha Sarkozi (Toronto)By Samantha Sarkozi (Toronto) on Posted in Corporate Governance
With the heightened awareness of climate change, wage disparities, gender inequality and the like, the effects of these and other environmental and social (E&S) issues are widespread, extending as far as topics like corporate governance and investing. In fact, in its report entitled “2018 Canadian Proxy Season Review” (the Review), Kingsdale Advisors (Kingsdale) notes a … Continue reading

Webinar – Corporate governance, shareholder activism, and hostile M&A: Key developments in 2018 and a look ahead

Joe BrickerBy Joe Bricker on Posted in Corporate Governance, M&A, Proxy Access, Proxy Battles, Securities, Shareholder Activism, Short selling, Uncategorized
Walied Soliman and Orestes Pasparakis, co-chairs of Norton Rose Fulbright’s Canadian Special Situations team, will host a 60-minute webinar on corporate governance, shareholder activism, and hostile M&A on Tuesday, February 12, 2019 at 12 p.m. EST. To sign up, please click here. Our Special Situations team played a leading role in some of the most … Continue reading

Global and Canadian Trends of Corporate Governance in 2019 and Beyond

Jaray Zhao (Toronto)By Jaray Zhao (Toronto) on Posted in Corporate Governance
Recently, public company boards are facing increasing scrutiny and greater expectations from various stakeholders, particularly in light of society’s elevated concerns regarding corporate culture, gender equality and climate change and sustainability. In its report entitled “2019 Global & Regional Trends in Corporate Governance” (the Report), Russell Reynolds Associates noted that in 2019 “[t]he demand for … Continue reading

CEO Activism: A Double-Edged Sword?

Russell Dufault (Toronto)By Russell Dufault (Toronto) on Posted in Compliance, Corporate Governance, Shareholder Activism
In a recent study published on SSRN by the Rock Center for Corporate Governance at Stanford University, authors David F. Larcker, Stephen Miles, Brian Tayan and Kim Wright-Violich argue that CEO activism – the practice of CEOs taking public positions on environmental, social and political issues not directly related to their business – is a … Continue reading

The Digital Dilemma: Cybersecurity and Boardroom Best Practices in the Technological Age

Ted BrookBy Ted Brook on Posted in Corporate Governance, Litigation, Securities, Uncategorized
Earlier this year, Commissioner Robert Jackson Jr. of the US Securities and Exchange Commission declared that cybersecurity is “the most pressing issue in corporate governance today.” Indeed, widespread digitization has fundamentally transformed the way that people do business, ushering in new heights of efficiency and connectivity. It has also created significant risk management issues for … Continue reading

Implications of the Collaborative Model of Corporate Governance

Amanda Ferriss (Toronto)By Amanda Ferriss (Toronto) on Posted in Corporate Governance
In a recent paper, Jill Fisch and Simone Sepe outline a new model for corporate governance: the Insider-Shareholder Collaborative model. A Shift Towards Collaboration Two models have previously dominated the corporate governance discourse: (i) the management-power model and (ii) the shareholder-power model. The former emphasizes a board’s decision-making authority as the corporation’s essential coordinating and … Continue reading

Exploring the Link between Gender, Governance, and Shareholder Activism

Kaitlin ShungBy Kaitlin Shung on Posted in Corporate Governance, Shareholder Activism
A study conducted by global consultancy firm Alvarez and Marsal (A&M) showed that companies with more women on their boards attract fewer activist investors. In particular, the study, which surveyed 1,854 public groups, revealed that companies not targeted by hedge fund activists had on average 13.4 per cent more women on their boards. Despite being … Continue reading

OSC Statement of Priorities

Danny UrquhartBy Danny Urquhart on Posted in Corporate Governance, Proxy Battles, Shareholder Activism
On July 5, 2018, the Ontario Securities Commission (“OSC”) released its annual Statement of Priorities (the “Statement”) for the financial year to end March 31, 2019. The Statement outlines the most pressing issues that the OSC hopes to address in connection with the administration of the Securities Act, regulations and rules. While investor protection is … Continue reading

Fee-Shifting By-Laws in Canadian Shareholder Litigation

Michael Viner (Toronto)By Michael Viner (Toronto) on Posted in Corporate Governance, Proxy Battles, Shareholder Activism
A fee-shifting by-law in the shareholder litigation context, “obligate[s] the plaintiff-shareholder to reimburse the corporation’s expenses (including attorneys’ fees and other costs) when the plaintiff [is] unsuccessful in litigation.” Shareholder litigation in the United States operates under the “American Rule” which provides that each party is responsible for their own attorney’s fees. Unlike South of … Continue reading

Tracking the Rise of Shareholder Activism through Withhold Campaigns in North America

Simone Nash (Toronto)By Simone Nash (Toronto) on Posted in Corporate Governance, Shareholder Activism
In a recent post about Canadian proxy contest trends, we discussed the growing concern with “The Active Passive investor” and potential issues on the horizon given a surge in the use of “withhold” campaigns. As of late, the prominence of withhold campaigns to signal shareholder discontent to boards of directors in North American markets has … Continue reading

“The Great White Short?” Canada Is the World’s #3 Destination for Activist Short Selling

Trevor ZeylJoe BrickerBy Trevor Zeyl and Joe Bricker on Posted in Corporate Governance, Proxy Battles, Securities, Shareholder Activism, Short selling
Recently, Activist Insight released a report on activist short selling. Activist short selling is when investors publicly bet on a stock going down in value. Among other interesting trends, the report shows that Canada ranks number 3 in the world for activist short campaigns. The data suggest that Canadian companies should be on high alert … Continue reading

Changes coming to Canadian Business Corporations Act (CBCA)

Denise Gan (Toronto)By Denise Gan (Toronto) on Posted in Compliance, Corporate Governance, Shareholder Activism
Bill C-25 received Royal Assent on May 1, 2018. The bill will amend the CBCA by: reforming certain aspects of director elections; creating requirements for public companies to disclose officer and director diversity representation; and introducing the new Notice-and-Access Regime. While some of the CBCA amendments have come into force, many of the amendments – … Continue reading

The Gender Question: BC Securities Commission asks for comment on disclosure requirements with respect to board gender diversity

Geoff MensBy Geoff Mens on Posted in Compliance, Corporate Governance, Shareholder Activism
In late 2014, the Canadian Securities Administrators (CSA) published “comply or explain” rules regarding female representation in director and executive officer positions. The requirements were codified in National Instrument 58-101 (the Disclosure Requirements) and created a positive duty for issuers in participating jurisdictions to disclose the details of female representation, including issuers’ targets, policies, and … Continue reading

TSX Adds New Website Disclosure Requirements

Danny UrquhartBy Danny Urquhart on Posted in Compliance, Corporate Finance, Corporate Governance
In October 2017, the TSX published updates under section 473 of the TSX Company Manual placing additional disclosure obligation requirements on non-exempted TSX-listed issuers. These updates became effective on April 1, 2018. The TSX’s updates mandate that each TSX-listed issuer (other than Non-Corporate Issuers, Eligible Interlisted Issuers and Eligible International Interlisted Issuers (as such terms … Continue reading

Corporate Governance in the Cannabis Sector

Simone Nash (Toronto)By Simone Nash (Toronto) on Posted in Compliance, Corporate Governance
Since the introduction of Bill C-45 to legalize the production, distribution and sale of cannabis for recreational use, the cannabis sector (the Sector) has been thriving. Despite many unknowns and uncertainties surrounding the Sector, investors appear unfazed as share prices continue to surge. Some key features of the Sector Even though Bill C-45 has not … Continue reading

Best Practices for Board Oversight and Disclosure of Environmental and Social Issues

Mark Bissegger (Toronto)By Mark Bissegger (Toronto) on Posted in Compliance, Corporate Governance, Shareholder Activism
In a recent post, we discussed investors’ growing interest in environmental and social (E&S) governance. As a recent report published by the Canadian Coalition for Good Governance (CCGG) demonstrates, public company boards are no less attentive to growing shareholder interest in E&S issues. The Directors’ E&S Guidebook (Guidebook), which is the product of consultations with … Continue reading
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