Topic: Corporate Governance

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Putting the “green” in green investing

The past several years have seen “green investing” rise to prominence. In 2020, environmental, social and governance (ESG) funds captured $51.1 billion of net new capital from investors, a fifth consecutive annual record. At the same time, companies are facing growing scrutiny of their environmental practices from institutional shareholders and activists. While these trends indicate … Continue reading

ESG & Shareholder Activism: Ready or Not, Here it Comes

By Katherine MacPhail (Calgary) on September 24, 2021 Posted in Corporate Governance, Securities, Shareholder Activism

“ESG” stands for Environmental, Social and Governance and describes a handful of criteria used by both issuers and investors to focus on a corporation’s impact and activity regarding topics like environmental protection, climate change, support for the local and global community, diversity in hiring and advancement, and employee compensation. This investment methodology, once considered novel, … Continue reading

A Recap of the OSC Decision on the Minimum Tender Requirement under the New Canadian Takeover Bid Regime

By Ivona Zegrean on September 24, 2021 Posted in Corporate Governance, Securities, Shareholder Activism

On February 23, 2021, the Ontario Securities Commission (OSC) released its reasons in ESW Capital, LLC, 2021 ONSEC 7 (the ESW Decision), in which the OSC considered the availability of an exemption from the minimum tender requirement for takeover bids. The ESW Decision dismissed the proposed bidder’s application for exemptive relief, but provided important clarifications … Continue reading

CP Rail Supports an ESG-Related Shareholder Proposal Which Includes Annual Advisory Vote by Shareholders on a Climate Action Plan

By Heidi Reinhart and The Special Situations Team on March 31, 2021 Posted in Corporate Governance, Shareholder Activism

TCI Fund Management Limited (TCI) recently successfully submitted a climate change-related shareholder proposal (the Proposal) to Canadian Pacific Railway Limited (CP) to be voted on at CP’s upcoming 2021 annual general meeting of shareholders. As stated in its circular for the meeting, CP supports TCI’s Proposal and recommends shareholders vote in favour of it. Of … Continue reading

A Review of 2020: A Catalyst for Corporate Governance Change

By Jennifer McPherson (Calgary) on January 5, 2021 Posted in Corporate Governance, Shareholder Activism

The COVID-19 pandemic coupled with the fight against anti-Black systemic racism has had a significant and potentially long-lasting impact on corporate governance. In its report entitled “The New Abnormal: How 2020 Has Changed the Future of Corporate Governance” (the Report), Kingsdale Advisors (Kingsdale) notes that directors have faced a string of challenges in 2020 that … Continue reading

Dialing In: Adapting to Virtual Shareholder Meetings

By Jenny Ng (Toronto) on September 28, 2020 Posted in Corporate Governance, Securities

The Shift to a Virtual World The COVID-19 pandemic has altered and changed many familiar corporate operational and governance practices and norms, including how issuers host their annual general meetings (AGMs). Broadridge Financial Solutions reported hosting 300 virtual meetings in 2019 and approximately 1500 virtual meetings this year thus far. In place of in-person only … Continue reading

ISS includes Economic Value Added in its Compensation Reports

By Denise Gan (Toronto) on May 24, 2019 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

By Monica Wong (Toronto) on April 29, 2019 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

Addressing Flawed Corporate Culture

By Simone Nash (Toronto) on April 8, 2019 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

By Hugo Margoc (Toronto) on April 1, 2019 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

By Robert Corbeil (Toronto) on March 12, 2019 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

Corporate Governance in the Age of Passive Investing

By Olga Lenova (Toronto) on February 7, 2019 Posted in Corporate Governance

In recent years there has been a marked increase in passive investing, consisting of investing in exchange traded funds and index funds. Widely dismissed when first launched in the mid-1970’s, index funds are now estimated to account for approximately 20% of global aggregate investment fund assets. In the next five years, they are expected to … Continue reading

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

By Joe Bricker on January 31, 2019 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

By Jaray Zhao (Toronto) on January 18, 2019 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?

By Russell Dufault (Toronto) on December 11, 2018 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

By Ted Brook on November 5, 2018 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

By Amanda Ferriss (Toronto) on October 12, 2018 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

Digitizing Board Meetings

By Victoria Riley (Toronto) on October 2, 2018 Posted in Corporate Governance, Securities, Uncategorized

In the day and age of virtual reality and delivery dinner at the click of a button, it seems almost comical to think that we use sliced bread to explain an invention’s usefulness. Given today’s unprecedented surge in technology, it is perhaps unsurprising that the EY Center for Board Matters (“EY”) reported digital transformation as … Continue reading

Exploring the Link between Gender, Governance, and Shareholder Activism

By Kaitlin Shung on August 10, 2018 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

By Danny Urquhart on July 27, 2018 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

By Michael Viner (Toronto) on July 23, 2018 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

By Simone Nash (Toronto) on July 16, 2018 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