Topic: Corporate Governance

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Board diversity: the latest metrics and government measures

The diversity of boards has become a target of greater scrutiny. This scrutiny has come not only from activist investors seeking higher returns and better governance, but from governments and various interest groups outside the corporation. It has homed in on a variety of director characteristics, including length of tenure, age, gender, and visible minority … Continue reading

Majority voting and board diversity trends

As recently highlighted in the Harvard Law School Forum on Corporate Governance and Financial Regulation, a report (the Report) by Institutional Shareholder Services (ISS) found that majority voting practices and annual board elections, along with increases in board diversity, are the new norm. The Report examined the public filings of Standard & Poor’s U.S. “Super … Continue reading

Updates to ISS proxy voting guidelines

Institutional Shareholder Services (ISS) is one of the leading proxy advisory firms that makes voting recommendations on public companies’ proxy resolutions. In Canada, ISS’ recommendations on transactions and governance issues can have a significant impact on many shareholders’ opinions, and particularly the opinions of institutional shareholders. ISS publishes its proxy voting guidelines which explain the … Continue reading

The State of Proxy Access Reforms

With the rise of shareholder activism led by what some refer to as “constructivists”, “reluctavists” or “suggestivists” (and, yet others, those who commit “extortion”), shareholders have become increasingly distrustful of leaving matters of corporate governance to management and boards. One tool that investors can rely on is exercising rights pursuant to a proxy access by-law, … Continue reading

Corporate governance at top of mind for investors

A recent article from IR Magazine, “Governance crucial factor for nine in ten Canadian investors” (the Article), highlights just how much emphasis Canadian investors place on good corporate governance. Canadian companies would be smart to take heed and ensure their corporate governance is in line with accepted good practices. The Article reports that, of the … Continue reading

How corporate governance reforms spread

Recent research on the adoption of majority voting rules provides some insight on how corporate governance reforms are adopted and change company behaviour, and suggests that reforms may have the greatest impact on firms that are late to adopt them. The push for majority voting, which requires that directors receive a majority (rather than a … Continue reading

Better boards through better risk management practices

Prior to 2008, it was not uncommon for a bank to assign its risk oversight responsibilities to the audit committee of its board of directors, or in some cases, to even divide those tasks between a number of other committees. Since then, a number of policies and guidelines have been enacted (including, notably, the Basel … Continue reading

Top board priorities for 2016

With 2016 upon us, boards are likely to reflect on the organizational challenges they expect to face in the coming year, and to develop effective strategies to tackle these challenges. A recent EY publication anticipates that in developing these strategies, boards will focus their energies on addressing the following five critical challenges: 1. Board effectiveness, … Continue reading

Glass Lewis’ 2016 Canada Policy Guidelines

Last week, Glass Lewis & Co. (Glass Lewis), a top governance analysis and proxy voting firm, released its 2016 proxy season guidelines for Canada and the United States, as well as its guidelines for evaluating shareholder initiatives. Here, we summarize what’s new in Glass Lewis’ 2016 Canada Policy Guidelines (the Guidelines) for the upcoming 2016 … Continue reading

ISS proposed proxy voting policy changes for 2016

Institutional Shareholder Services (ISS), one of the world’s most influential proxy advisory firms, recently released its draft proposed voting policies for 2016.  ISS is currently requesting feedback on new or potential changes to three voting policies in Canada covering the following areas: director overboarding, compensation-related votes at externally-managed issuers and the introduction of an equity … Continue reading

Emerging trends: Activist shareholder bans

As a result of the rising tide of shareholder activism in Canada, a number of defensive tactics have been developed by corporate management. The newest innovation in management’s arsenal is the activist investor ban—an agreement between an issuer and a purchaser that restricts the purchaser from transferring its shares to activist investors. Activist investor bans … Continue reading

Managing risk: A primary concern for effective boards

In today’s economic climate the role of a board of directors is as dynamic as it is demanding. Boards are now forced to take on expanded roles to better guide their organizations through uncertain economic times. In addition, directors are expected to be proactive in understanding and managing risk, and capitalizing on the opportunities they … Continue reading

Management diversity: Do women in management lower a firm’s risk profile?

In an earlier post, we commented on the formal amendments to National Instrument 58-101 – Disclosure of Corporate Governance Practices and Form 58-101F1- Corporate Governance Disclosure imposing enhanced disclosure requirements with respect to female representation on the boards and in executive officer positions of TSX-listed issuers.  As we discussed earlier this year, the correlation between … Continue reading

The Dissatisfied Institutional Investor: Intervene or Exit?

Considering the role of institutional investors in influencing corporate governance is critical to effective corporate decision making. Broadly, dissatisfied institutional investors choosing to act can do one of the following: (a) intervene with management, either cooperatively or uncooperatively as dissident shareholders, or (b) exit by selling their shares. Many theories have been put forward to … Continue reading

Delaware Supreme Court provides guidance on the interpretation of advance notice bylaws

According to a recent Delaware Supreme Court decision, advance notice bylaws are to be interpreted by “their commonly accepted meaning unless the context clearly requires a different one or unless legal phrases having a special meaning are used.”[1] The plain meaning of “date”  means “the actual date of the meeting, not a possible future date” … Continue reading

Multiple activist campaigns on the rise as activists outnumber target companies

A corollary to the trend of rising shareholder activism is the increasing frequency with which target companies are facing multiple activist campaigns. Companies that have successfully defended activist campaigns in the past are not free to rest on their laurels – if the same issues persist, future attacks may be on the horizon. The Wall … Continue reading

Forum selection by-laws come to Canada

Norton Rose Fulbright Canada has recently been involved in the introduction and adoption of forum selection by-laws in Canada.  This article will provide a brief description of forum selection by-laws and their benefits and uses.  For a more in-depth analysis, we invite readers to watch the replay of the talk or reach out to the … Continue reading

Executive compensation and shareholder activism

Executive compensation has been a hot button issue as of late. Not only has executive compensation come under increased scrutiny from politicians, regulators and the public at large, it is an issue that is also top-of-mind for shareholders, analysts and proxy advisory firms. For example, the Financial Post published an article earlier this year entitled … Continue reading

“Dead hand proxy puts” under scrutiny in Delaware

A decision of the Delaware Chancery Court last fall has set off a wave of books and records inspection demands by stockholders, as well as threatened litigation, for Delaware corporations that have entered into credit agreements containing “dead hand proxy put” provisions.  A “dead hand proxy put” allows the lender to demand immediate repayment of … Continue reading

Moving away from a mechanistic evaluation of board term limits

Earlier this month, Robert Pozen, senior lecturer at Harvard Business School contended that a simple reliance on board term limits as an evaluation tool of corporate performance is based on “faulty logic”.[1] Concerns around extended tenure of directors typically include anxieties over compromised director independence and the development of a friendliness with management. According to … Continue reading

The CCGG makes a push for enhanced proxy access

The Canadian Coalition for Good Governance (CCGG) recently released its much anticipated policy paper on “proxy access”, a term which refers to shareholders’ conceptual right  to nominate directors and have those nominees placed on management’s ballot. The CCGG takes the position that this right, which is supplemental to a shareholders right to elect directors, “is … Continue reading

Webinar: Important corporate governance development – Forum Selection By-law

On May 14, 2015, Norton Rose Fulbright hosted a webinar on an important corporate governance development: Forum Selection By-law.  Walied Soliman and Orestes Pasparakis, co-chairs of Norton Rose Fulbright’s Special Situations Team, were joined by Cathy Singer and Ruth Wahl, senior partners at Norton Rose Fulbright, to discuss how this development works and how it … Continue reading

Forum selection by-law

On May 14, 2015, Walied Soliman and Orestes Pasparakis, co-chairs of Norton Rose Fulbright’s Special Situations Team, were joined by Cathy Singer and Ruth Wahl, Senior Partners at Norton Rose Fulbright, to host a webinar, “Important Corporate Governance Development: Forum Selection By-law”. As discussed during the webinar, proposed text for a forum selection by-law can be found here.  A copy … Continue reading
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