Addressing Flawed Corporate Culture

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 on businesses’ profitability, brand, and marketability.  Indeed, as noted in this previous post, millennials’ investment decisions are heavily influenced by a company’s brand.

But when these scandals do arise, what recourse is available? An article by Jennifer G. Hill, a Professor of Corporate Law … Continue Reading

Access to Corporate Records Amidst Controversy

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 was involved in a highly publicized controversy believed to be injurious to the company’s image. An investigation was launched, and a special committee was formed, and the relationship quickly deteriorated. The board severed contractual ties with him, and sought his resignation despite him being the … Continue Reading

Privacy Breaches: The Question of When, Not If

Photo of Shreya Gupta (Toronto)By Shreya Gupta (Toronto) on Posted in Uncategorized

In recent years, a spate of high-profile privacy breaches have made it increasingly clear to consumers and regulators that businesses must take stronger precautions in safeguarding user data and protecting privacy rights. These incidents have become so common that for many companies, the question of whether they will fall victim to cybercrimes has become a matter of when, not if.

The consequences of a privacy breach may be drastic. Companies such as Equifax, Yahoo, and Target – which have all suffered data breaches involving more than 100 million customer accounts – have borne significant reputational costs. Given the importance of … Continue Reading

Lesson Learned: An Examination of Trends in Shareholder Proposals

Photo of Peter Valente (Toronto)By Peter Valente (Toronto) on Posted in Proxy Access, Proxy Battles, Shareholder Activism

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 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?

Photo of Joseph Palmieri (Toronto)By Joseph Palmieri (Toronto) on 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

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

Photo of 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 belief among investors globally that “an issuer’s [E&S] activities will impact its financial returns and long-term sustainability” and furthermore, that investors view E&S issues as significant considerations when making investment decisions. The Review highlights some key trends regarding E&S governance … Continue Reading

Corporate Governance in the Age of Passive Investing

Photo of Olga Lenova (Toronto)By Olga Lenova (Toronto) on 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 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

Photo of Orestes PasparakisPhoto of Walied SolimanBy Orestes Pasparakis and Walied Soliman on 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

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