Lesson Learned: An Examination of Trends in Shareholder Proposals

Shareholder proposals are often viewed as an essential tool for maintaining corporate accountability, but what role do they play in shaping corporate governance? ISS Analytics recently published a study (the Study) that reviewed the impact of shareholder proposals on corporate governance practices among U.S. companies since 2000. The Study offers helpful insights into shifting trends in corporate governance and investor attitudes, and provides important lessons for Canadian issuers.

A brief history of shareholder proposals in the U.S.

According to the Study, after a significant surge in the number of governance proposals in the early 2000s, the number of proposals … 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 rights, and disclosure. Companies with more stringent governance policies in place are awarded higher points. For example, a company with two-thirds independent directors will be awarded more points for that category than a company that has the majority of its directors being related … Continue Reading

Could a national securities regulator hinder shareholder activism in Canada?

By Joseph Palmieri (Toronto) on February 20, 2019 Posted in Uncategorized

Canada is the only G20 country without a national securities regulator. Despite coordination among the provinces and territories, the current regime is often thought to encourage shareholder activism – whether by permitting forum shopping for more favourable regulations or given the reality that decentralized efforts mean scarcer resources to combat unwelcome tactics. However, after decades of discussion and debate, the Supreme Court of Canada released a decision late last year which could lead to the adoption of a single regulator, dubbed the Capital Markets Regulatory Authority (CMRA).

While the Supreme Court judgement paves the way for a pan-Canadian … 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 surpass actively managed funds in the United States. Proponents of passive investing hailed Warren Buffet’s win of a bet against a prominent hedge fund manager that his investment in an index fund would outperform the latter’s hand-picked investments over a 10-year period as another sign … 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 complex and high-profile corporate governance, shareholder activism and hostile M&A matters of 2018. The webinar will highlight some of the key trends and developments in 2018 and trends taking shape in 2019.

This will be essential viewing for directors and executives at public companies, … Continue Reading

Special Situations team publishes article on abusive short selling in Globe and Mail

By Orestes Pasparakis and Walied Soliman on January 21, 2019 Posted in Uncategorized

Orestes Pasparakis and Walied Soliman, co-chairs of Norton Rose Fulbright’s Canadian special situations team, and Joe Bricker, associate, have published an article highlighting the growing problem of abusive short selling in Canada and calling for legislative reform. The article ran in the Globe and Mail on Saturday, January 19 and can be viewed here. … 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 board quality, effectiveness, and accountability to shareholders will continue to accelerate across all global markets.” The Report discussed five major global trends that are expected to define the corporate governance landscape in 2019:

Improved board quality and composition continues to be the essence of

Walied Soliman interviewed in “Creating a Unified Vision — How Some Activists are Working with Boards and Management”

By Joe Bricker on January 16, 2019 Posted in Uncategorized

Walied Soliman, Global Chair of Norton Rose Fulbright and co-chair of the firm’s Canadian special situations team, was recently interviewed in a piece by Skytop Strategies (view here). The piece draws on recent experiences to discuss how shareholders activists and boards often work together to achieve shareholder value after reaching a settlement and averting a proxy contest.

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 “double-edged sword”: CEOs who take public positions might build loyalty with employees, customers or constituents, but these same positions can inadvertently alienate important segments of those populations.

The authors – who aimed to better understand the implications of CEO activism by examining its prevalence, the … Continue Reading