Issues Update

CSCS strives to provide its members with timely information on recent changes and developments which affect them.  On a regular basis, as part of a member benefit, we email the membership to inform them of such developments, surveys, information sharing and upcoming events. 
  • 19 Jul 2016 10:23 AM | GPC Webmaster (Administrator)

    July 15, 2016

    Alberta Securities Commission
    Autorité des marchés financiers
    British Columbia Securities Commission
    Financial and Consumer Services Commission (New Brunswick)
    Nova Scotia Securities Commission
    Nunavut Securities Office
    Ontario Securities Commission
    Office of the Superintendent of Securities, Newfoundland and Labrador
    Office of the Superintendent of Securities, Northwest Territories
    Office of the Yukon Superintendent of Securities
    Superintendent of Securities, Department of Justice and Public Safety, Prince Edward Island

    To the attention of:

    Robert Blair, Secretary
    Ontario Securities Commission
    20 Queen Street West
    Suite 1900, Box 55
    Toronto, Ontario M5H 3S8
    comments@osc.gov.on.ca

    Me Anne-Marie Beaudoin, Corporate Secretary
    Autorité des marchés financiers
    800, Square Victoria, 22e étage
    C.P. 246, Tour de la Bourse
    Montréal, Québec H4Z 1G3
    consultation-en-cours@lautorite.qc.ca

    Re:    CSA Multilateral Staff Notice 54-304 – Final Report on Review of the Proxy Voting Infrastructure and Request for Comments on Proposed Meeting Vote Reconciliation Protocols

    Dear Sirs, Mesdames,

    The Canadian Society of Corporate Secretaries (“CSCS”) is a national not-for-profit organization representing the interests of corporate secretaries and governance professionals in Canada.

    The Society has been seeking fundamental changes in the way shareholder voting is regulated and administered for a long time now.

    Our first initiative in 2008 was a white paper suggesting how Canada's leading corporation statutes might be amended to ensure that all shareholders benefit from equal rights.

    Our second, bolder initiative, was in 2011 when the Society devoted considerable financial and material resources and convened all stakeholders, including issuers, institutional shareholders, federal and provincial regulators, transfer agents, intermediaries, proxy agents, and proxy solicitors to a national Shareholder Democracy Summit conference held in Toronto in the fall of 2011 (the "Summit").

    Since then, the Society has met with the CSA, participated in CSA roundtables in Toronto and Calgary, and provided regular updates on the state of proxy voting in Canada at its annual national governance conference and at various regional events during in the course of each year.

    The Summit was extremely revealing.

    It confirmed that substantial dysfunction exists in the processes used to administer shareholder voting when shares are held beneficially. Beneficial shareholders make up a very large majority of the shareholder base for public companies. That fact alone more than justifies prompt and compelling regulatory action to address the dysfuntion.

    Though the proximate causes of the symptoms of dysfunction are many and varied, in the end they are all rooted in the necessary system of intermediated shareholding.

    Intermediation became necessary as a result of the exponential growth in the volume and pace of transactions in the securities markets.  The root cause of the dysfunction that plagues proxy voting is that the shareholder's right to vote wasn’t adequately addressed when the book-based ownership and settlement system required to facilitate other shareholder rights was put in place. The result is a system where information concerning shareholder voting entitlements doesn't flow efficiently, or accurately.

    The securities regulators candidly stated at the Summit that they felt is would be imprudent to undertake take any regulatory reform when the shareholder voting processes in place were poorly understood and too opaque for all concerned.

    The five-year anniversary of the Summit is approaching this fall.

    Here is the timeline of the regulatory response to the Summit:

    • August 15, 2013 - CSA Consultation Paper 54-401 – Review of the proxy voting infrastructure;
    • October 31, 2013 - CSA Staff Notice 54-302 - Update on CSA Consultation Paper 54-401 Review of the Proxy Voting Infrastructure;
    • January 29, 2014 - CSA holds the first roundtable discussions in Toronto;
    • January 29, 2015 - CSA Staff Notice 54-303 - Progress Report on Review of the Proxy Voting Infrastructure;
    • March 31, 2016 - CSA Staff Notice 54-304 - Final Report on Review of the Proxy Voting Infrastructure  and Request for Comments on Proposed Meeting Vote Reconciliation Protocols.

    One thread that unites all these initiatives is the CSA’s consistent and oft-expressed view that shareholder voting is not only a key shareholder right, it is a right that is vitally important to the health of the Canadian capital markets. It is the key element in the foundation supporting the right of investors to influence, and ultimately control, the fate of the enterprises to which they entrust their savings. Regulators and shareholders alike have expressed in clear unambiguous terms the growing importance of ensuring that shareholders are able to exercise their right to vote in a meaningful, efficient, timely, and accurate way.

    The Society feels that the CSA have spent a lot of time, and considerable resources, in an attempt to shore up a ponderous system that is fundamentally at odds with the objective of ensuring that shareholder voting is meaningful, efficient, timely, and accurate.

    The root cause of the dysfunction is the multitude of disparate processes, essentially paper borne, managed in silos, among a broad array of agents, that in the aggregate fail to deal efficiently with the pace and volume of securities transactions, and the very tight timetable on which shareholder voting must take place.

    The protocols that the CSA have elaborated in the course of their work to date amount to little more than a minor and temporary stop gap measure. The protocols may succeed in propping up the mind-boggling complex teetering edifice of proxy voting bureaucracy, but nothing more. In the near term, the protocols will increase costs for the agents and those costs will surely get passed along to the issuer community, without delivering much, if anything, in the way of real improvement.

    The path to a robust solution is clear, and has been clear from the beginning.

    The time has come to apply the very same solutions to shareholder voting as have long been applied, with astonishing success, to the exercise of the shareholder’s other rights: the right to own and dispose of shares, and the right to receive dividends.

    Digital technology, including information technology, normalized data flows, and open networks, that succeed in managing millions of customer accounts, and hundreds of millions of financial transactions daily, must be applied to the exercise of shareholder voting.

    It's that simple.

    It's that compelling.

    It is long, long, overdue.

    The apology for the current moribund system is that "it's complicated".

    The reality is that our society is complicated. Air travel is complicated. Banking is complicated.  Securities markets are complicated.

    Normalized machine-managed data flows exist to make extremely complex environments and processes effective, timely and efficient. Machines can do very well in a fraction of a second what humans armed with telephones, fax machines, and reams of paper take weeks to accomplish in a flawed inefficient way. We know this. Complex machine-run processes are not news. They are a mature approach that has the proven and tested ability to tame complexity.

    In close to five years of concerted work the CSA are proposing a suite of protocols that the Staff Notice describes as essentially a step in right direction, while expressing a vague hope that the system will heal itself, given enough time.

    It will not heal itself.

    Here are the steps the Society recommends as a clear path to an effective long-term solution to these persistent issues.

    These steps form a program that ought to be implemented immediately, without further delay.

    • Forming a regulators’ task force (year 1):
      • Concerned regulators meet to strike a multi-jurisdictional and multi-disciplinary task force managed by a steering committee;
        • Corporations Canada (corporate law concerns relating to shareholder rights);
        • Canadian Securities Administrators (governance and oversight of market participants, protection of investor interests);
        • §  Bank of Canada (governance of market settlement. Share voting rights are a vital component in market settlement);
      • Setting the objective: to establish a transparent, cost-effective, efficient, machine-based proxy voting infrastructure that accomplishes the following:
        • Votes may be cast in accordance with voting entitlements as at the record date;
        • Votes that are cast are accurately tabulated;
        • Beneficial shareholders enjoy the same rights as registered shareholders;
    • Information gathering (years 1, 2, and 3);
      • All agents involved in the shareholder voting process participate in a mandatory process mapping exercise under the direction of the task force steering committee;
      • The objective of the process mapping step is to create a normalized process map as a foundation for the development of normalized data flows;
      • Publishing a normalized process map and normalized data fields to support machine-based proxy voting data exchange;
    • Policy and rules formulation (year 4);
      • Exploring policy options and the regulatory changes needed to support the normalized process map;
      • Formulating, publishing and promoting the resulting changes to shareholder voting processes as well as corporate and securities legislation required to support the new processes;
    • Implementing the changes in the shareholder voting processes (year 5);
      • Communicating the changes that will take place;
      • Monitoring developments.

    Based on the Society’s views and recommendations, the Society responds to the specific requests for comments put forward by the CSA as follows:

    1. The Protocols contain detailed guidance on operational process to support accurate, reliable and accountable proxy voting. Does the guidance achieve this objective? If not, what specific areas can be improved, or what alternative guidance could be provided?

    Based on the Society’s views and recommendations expressed above, the guidance fails to achieve the stated objective and the Society advocates the alternative approach set out above.

    2. What are the cost and resource impacts on key stakeholders of implementing the information and communication improvements contemplated in the Protocols? In particular, what issues do intermediaries such as investment dealers anticipate in implementing the Protocols, and to what extent would any additional costs associated with implementing the Protocols be passed on to issuers or investors?

    The Society anticipates that the Protocols will increase the costs incurred by transfer agents, tabulators, the proxy agent, and intermediaries and that those costs will most likely be passed on to issuers. The Society believes that the resulting improvements will be marginal in terms of addressing the fundamental issues relating to shareholder voting. No only will the benefits not justify the costs, the process of refining and implementing the Protocols will distract from and substantially delay, possibly impeding in the long term, the implementation of an efficient process.

    3. What is a reasonable timeframe for implementing the information and communication improvements contemplated in the Protocols?

    The Society believes that the Protocols, to the extent that they will be effective in reducing dysfunction in the current shareholder voting processes, ought to be implemented without delay.

    4. Which aspects of the Protocols (if any) should be codified as securities legislation, and which as CSA policy or CSA staff guidance?

    The Society’s view is that there are substantial and unacceptable agency costs in the current shareholder voting processes that stand in the way of investors exercising their right to vote and participate effectively in the governance of the enterprises they invest in. It is a core mission of the Canadian Securities Administrators to ensure that investors’ rights are protected and that agency costs are monitored and controlled. CSA policy and CSA staff guidance are effective tools to clarify rules and support compliance where the existing rules provide a strong framework for the achievement of regulatory objectives. That framework needs to rest on a sound regulatory foundation. The Society’s view is that a sound regulatory foundation does not exist at this time.

    5. Not all the entities that engage in meeting vote reconciliation are “market participants” or subject to compliance review provisions (where the “market participant” concept does not exist) under securities legislation. Do you think that all entities that play a key role in meeting vote reconciliation should be “market participants” or subject to compliance review provisions, including proxy voting agents and meeting tabulators?

    There is at least one significant regulatory gap in the oversight of shareholder voting processes. The securities dealers have for a very long time outsourced their regulatory responsibilities related to shareholder voting to a proxy agent. That agent plays a central and key role and it operates in a regulatory vacuum, not to mention in a monopoly position without meaningful controls or oversight. It is difficult to understand why the regulators have tolerated that situation for so long, particularly so where, as here, there is long-acknowledged dysfunction that is treading on investor rights.

    The Society thanks the CSA for this opportunity to comment in relation to this important initiative.

    Please contact the undersigned if you wish to discuss our comments.

    Sincerely,

    Lynn Beauregard                                                       David Masse
    President                                                                     Chairman of the Board
    lynn.beauregard@cscs.org                                       david.masse@cscs.org


  • 28 Oct 2011 12:45 PM | GPC Webmaster (Administrator)

    The Summit was an unprecedented gathering of all the key stakeholders who have a role to play in the regulation and administration of the processes by which the holders of shares of Canadian public companies vote their shares at shareholder meetings.

    The current processes do not adequately serve the interests of participants in the Canadian capital markets. The reasons for this are many and varied, and are in large measure due to the unprecedented growth in the volume and complexity of transactions in the capital markets in the recent past.

    The Summit process, which is continuing, is a unique and unprecedented opportunity for all stakeholders to gather and share vital information with the objective of improving the voting process to ensure that it can serve appropriately as regulators and public interest groups place increasing importance on shareholder democracy.

    The Society has taken upon itself the role of catalyst for the Summit as our members as corporate secretaries and governance professionals witness the dysfunction of the current system first hand and we see the companies we serve and their shareholders suffer the consequences.

    What we have learned in organizing the Summit to date is that the simple act of getting the stakeholders in each other’s presence, and sharing information that is presently trapped in silos, affords insights that will allow all the stakeholders to learn how they are able to contribute to improving the existing processes.

    The Summit process presents an opportunity to the participants, as Canadians, of developing an efficient modern shareholder democracy process that will be a significant competitive advantage for Canadian capital markets and serve as an example to US, European and Asian markets.

    In the course of the Summit, the participants thanked the Society for assuming the leadership role on these issues and all the key stakeholders confirmed their belief that the issues raised by the Summit process were vital issues and that the CSCS should continue to lead the stakeholders towards the development of a renewed, efficient and transparent shareholder rights process.

    Here are the interesting things I picked up in my notes. Some are similar to Sylvia's observations. I missed the US panel and some of the international panel because of interviews I was giving to the Canadian media.

    • Danielle Larivière of Jarislowsky Fraser noted that while wrap accounts are entitled to vote, the current systems for data exchange lack fields for voting with the result perhaps 20% of the vote is not coming through. She also pointed out that the complexity and lack of transparency in the system is such that it can take a number of annual meeting cycles of an issuer before the voting problems become evident to the investment manager, and thereafter another cycle or two to address;
    • She further noted that in theory the time required to recall shares before the record date so that they can be voted is T+3, but in practice it takes longer than that, futher complicated the recall process;
    • Paul Schneider of Ontario Teachers noted that the lack of transparency is where all the confidence erodes, and that in an era where the shareholder vote has become a very important issue, and important for the issuers as well, since there is more riding the votes with Say on Pay, and Majority Voting, it is critical for the system to become transparent.
    • He added that the chief issue is the lack of end to end confirmation. ‘We only see the vote going to Broadridge, then we see the voting results and we have no way to know if the vote actually counted, we always have a nagging question whether the vote counted and we shouldn’t have to rely only on hope.’
    • Jason Milne of Phillips Hager & North noted that there were several processes in place for beneficial shareholders to gain the right to attend and participate fully at meetings, but that in practice none of those processes are capable of actually working.
    • He added that shareholder confidence in the proxy voting system is essential to the functioning of the capital markets.
    • Danielle Larivière added that ‘we want the same confidence for votes that we get for dividends and corporate actions and currently there are no checks and balances and no audit assurance’.
    • Bill Brolly of Computershare noted the need to improve business processes and data interchange among participants in the shareholder voting system. He noted that faxes are still in use to convey data related to voting.
    • He added that he thought that the continued existence of the OBO / NOBO distinction was inconsistent with resolving the business process issues.
    • Benjamin Silver asked whether the rumoured practice of so-called ‘restricted proxies’ by which dealers upon request assign voting rights to beneficial shareholders who acquired shares after the record date in fact existed and Suzy Monteiro of Phoenix Capital Partners, a proxy solicitor confirmed that it did.
    • Fran Daly of CDS suggested that a central reconciliation hub might be an ingredient in improving the voting processes.
    • David Masse suggested that a single shareholder dashboard where all shareholders might vote their shares and drill down to the underlying disclosure information would be desirable.

    As for next steps, we have are reconvening the organizing committee next week to arrive at a consensus, but some things seem fairly obvious:

    • It became clear that we were missing a panel of investment managers, managed funds, etc., as well as a panel of broker/dealers and retail shareholders. The retail shareholder view, in my opinion, is represented by the securities commissions. Our attempts to get FAIR to participated were not successful. I think that as long as we get the other two groups we’ll have completed the “show & tell” step that was the objective of year 1 of the Summit. RBC Dexia, Canada’s largest custodian, has offered us its conference facilities and some grunt work to organize the two remaining panels in the coming months;
    • The conference materials, including the rapporteur’s notes and the transcript of the sessions need to be posted online (that work is well advanced and is continuing) and organized.
    • A timeline with achievable milestones needs to be developed to carry the project forward;
    • The next instalment of the Summit, in a year’s time, will focus on the issues from a process perspective, looking for paths that can be taken to arrive at an efficient system for shareholder democracy. Features of a transparent efficient systems that will be explored will likely include:
      • A complete revamp of the business processes for sharing information among the transfer agents, the depository, the proxy agent, custodians, brokers, institutions, voting agents, and ultimately retail shareholders, coupled with information processing standards to permit the flow of information in a consistent way among the players;
      • A unified shareholder information and voting dashboard allowing all shareholders to vote in the same way with the same ability to drill down into the supporting documentation;
      • Processes that lend themselves to reconciliation and verification to support third party audit and quality assurance so that the voting process is transparent and effective;
    •  Proposals for regulatory reform to table at the next Summit, including
      • Changes to the corporation laws to allow issuers to treat registered and beneficial shareholders equally;
      • Changes to the securities laws and regulations, and to corporation laws to all the gap between the record date and the meeting date to be all but eliminated, and reduced to M-3, with the proxy cutoff and voting record date possibly being the same day;
      • Changes to the securities laws and regulations to provide standards and structure for the role of the proxy agent.

    David Masse
    Chairman of the Board
    Canadian Society of Corporate Secretaries
    (514) 841-3277
    david.masse@cscs.org

  • 07 Sep 2011 12:43 PM | GPC Webmaster (Administrator)

    The focus on all aspects of corporate governance has been steadily increasing.

    The initial focus was on the role of directors in ensuring that the business of the corporation is managed to maximize value for shareholders. As enterprises failed earlier in the decade as a result of mismanagement, the focus increased sharply, and the burden of regulation and expectations related to best corporate governance practices increased proportionately.

    It is the natural course of that progression to focus on the role of the shareholder in selecting, electing, evaluating and eventually replacing the directors.

    A number of important initiatives along those lines are gaining traction in all jurisdictions. Say-on-pay and majority voting are two of the most important of those initiatives. Institutional shareholders and their advisors are paying much more attention to how they vote their shares in director elections.

    This is good because it has real potential to motivate directors to pay closer attention to their role, and to how their decisions are perceived and evaluated by shareholders. Social pressure resulting from votes withheld from directors, particularly where the directors’ re-election might be in doubt, is strong medicine indeed.

    The amalgam of these measures is what is generally referred to as “shareholder democracy”.

    For a democracy to function well, the people must be able to vote. This begs the question whether shareholders have the right to vote. The answer at first blush for holders of common shares is self-evident: of course shareholders have the right to vote.

    The real nub of truth for director elections is much more nuanced and quite a bit more problematic to arrive at however.

    First off, not all shareholders have the right to vote. Some shares may not have voting rights. But even for typical common shares that do have voting rights, not all holders of those shares are treated equally. Only registered shareholders are contemplated as having the full exercise of the rights that are attached to the shares they hold. Shareholders whose name is not entered on the register of shares are not shareholders within the meaning of most corporation laws, and those holders have no standing to vote.

    This is increasingly problematic since most shareholders are not registered holders. Their shares are held on their behalf by others. In the first case, the actual registered shareholder is the depository. In the US it’s the Depository Trust Company, in Canada it’s the Canadian Depository for Securities. The depositories hold the shares on behalf or brokers and other intermediaries. As often happens, there can be a maze of intermediaries between the holder and the registered share position. Holders whose shares are held this way are “beneficial shareholders”.

    The financial rights attached to shares are well administered in the current system. This means that registered and beneficial shareholders alike receive the dividends and proceeds of transactions to which they are entitled quickly and reliably.

    It is not necessarily so with the right to vote. Whereas the incentives of all market participants are clear and well-aligned with respect to financial rights, voting rights haven’t benefitted from the same focus. The incentives are sometimes not as well perceived or appreciated, with the result that the alignment among participants that would be required to allow votes to be delivered and counted as easily and efficiently as dividends is lacking.

    The result is that the shareholder voting system is in large measure dysfunctional.

    That dysfunction is some way or other sometimes results in the effective disenfranchisement of beneficial shareholders. The impact is not merely felt by small retail shareholders as one might expect. Large institutional shareholders fall victim to the dysfunction as well.

    The problems are exacerbated by the complexity of the capital markets, with the practices of share lending and short selling compounding the difficulty of determining who is truly entitled to cast the votes associated with a given share. Because many shareholders simply do not vote, it can be difficult to determine instances of over-voting, which is where more than one holder votes the same share.

    There is a growing acknowledgement in the US and Canada that the processes of shareholder democracy need attention, particularly since both regulators and institutional shareholders are placing substantial wagers on shareholder votes as an incentive for better and more robust corporate governance.

    Those that have sought to map the processes by which shares are voted have drawn flow charts of daunting complexity. A symptom of that complexity is that each of the stakeholders in the voting process only sees the narrow slice of the overall voting pie that is closest to them. This is true of shareholders, issuers, transfer agents, proxy agents, intermediaries, depositories, custodians, proxy solicitors, brokers, regulators, and governance professionals.

    Each stakeholder has a vested interest in the way the current processes work. In some ways they perceive themselves to be invested in the dysfunction. In some cases this may be true. In other cases the complexity of the system makes it difficult for a given stakeholder to perceive where their best interests truly lie, and they may be reluctant to consider change that they might otherwise embrace if they had a better understanding of the whole pie.

    The Canadian Society of Corporate Secretaries represents one of those stakeholders: corporate secretaries and governance professionals. In many ways we are the professionals closest to the front lines.

    CSCS believes that a necessary first step in transforming the processes of shareholder democracy to make them suitably efficient and reliable, is for all stakeholders to gain a better understanding of the whole pie. The multiplicity of parties and the very different worlds in which they operate have to date impeded gathering and sharing the information that is vital to that understanding

    The Canadian Society of Corporate Secretaries has decided to become the catalyst for that vital first step.

    CSCS is hosting an unprecedented gathering of the key stakeholders in the Canadian capital markets on October 24 and 25, 2011 in Toronto. The two-day summit conference will assemble all stakeholders in moderated expert panels. Participants will be strongly encouraged to submit papers to the Summit that set out the processes that they administer along with an evaluation of current outcomes, the strengths and weaknesses of the processes, and the opportunities for improvements they feel exist.

    As part of the Summit, there will be expert panels focusing on the proxy voting processes in other markets including the US, Europe, and Asia.

    At the conclusion of the Summit, CSCS hopes to have created an unparalleled repository of information that can serve as a basis for understanding how the current system works, identifying the points of failure, and proposing changes that serve to level the playing field for all shareholders, registered and beneficial alike. We will be working with noted academics from prominent Canadian universities to ensure that the documentation from the Summit, including video and transcripts of the sessions are assembled as a cohesive work to facilitate subsequent reference.

    Information concerning the Summit, including the preliminary program, registration and sponsorship is available on CSCS’ website at www.cscs.org.
     
    David Masse
    Chairman of the Board
    Canadian Society of Corporate Secretaries
    (514) 841-3277
    david.masse@cscs.org

  • 26 May 2011 9:38 PM | GPC Webmaster (Administrator)

    The OSC recently established a NI 54-101 Advisory Committee and Notice-and-Access Technical Working Group, which met for the first time in January to discuss developing a model for delivery of meeting materials through posting on a website, with the goal of implementing notice-and-access on a trial basis this coming proxy season.  

    The working group consists of representatives from CSCS, CCGG, CIRI, Broadridge, STAC, the dealer community and the proxy solicitation firms. The discussion at this first meeting focused on the following areas:

    Key mandate of the group to include:

    • Reducing delivery costs and improving timeliness of delivery by permitting notice-and-access delivery on the basis of implied consent
    • Minimizing risks that beneficial owners will not receive materials and vote in a timely fashion by identifying what, if any, minimum standards should apply to the delivery and voting processes used by issuers, intermediaries and their service providers
    • Giving priority to technology (electronic delivery of materials) and voting reporting and verification

    The following were raised as key issues (many of these will be the starting point for the work of the committee going forward):

    • issuer concerns about control of costs in the system and paying for services they don’t need
    • equal treatment of all shareholders and ability of shareholders to get information they want/need (or don’t want/need or think they don’t want/need, i.e., OBO’s not wanting mailings)
    • responsibilities that shareholders have as investors and “owners” a company (related to distribution of materials) and previous point
    • practices around use of proxies, omnibus proxies, voting information forms
    • transparency of who holds shares
    • transparency of voting process and results to ensure integrity of outcomes
    • concerns re: early search costs for small issuers (related to controlling costs)

    The Timeline for the outcome of the committee’s work is targeted for the summer. Further updates will be provided along the way by CSCS.

  • 26 May 2011 12:39 PM | GPC Webmaster (Administrator)

    Effective reform proposals that ensure equality, fairness, simplicity and clarity for all shareholders of Canadian companies

    This CSCS policy initiative explores the more important challenges that beneficial ownership of securities presents in the Canadian market.  The CSCS White Paper on Shareholder Communication available for download on this page proposes specific reforms to the current rules including proposals to amend the existing corporation statutes and the securities rules relating to shareholder communications.  These proposals, when they are adopted, will eliminate the most significant disparities that currently exist between beneficial and registered ownership as well as the challenges that issuers regularly face in their attempts to treat all their holders with an even and fair hand.

    Materials related to the CSCS Shareholder Communication initiative

    CSCS White Paper on Shareholder Communication

  • 20 Apr 2011 9:35 PM | GPC Webmaster (Administrator)

    On December 19th, the Canadian Securities Administrators (CSA) submitted a Proposed Repeal and Replacement of National Policy 58-201 Corporate Governance Guidelines, National Instrument 58-101 Disclosure of Corporate Governance Practices, and National Instrument 52-110 Audit Committees and Companion Policy 52-110CP Audit Committees. These proposed changes were posted for a comment period of 120 days, that expired on April 20th.

    The proposed new regime’s key features include:

    • A principles-based policy that moves away from the current ‘comply and explain model’

    • A new set of disclosure requirements which would apply to both venture and non-venture issuers

    • A broader scope of principles to encourage issuers to develop their own corporate governance and disclosure practices

    • A principles-based approach to the concept and definition of independence

    The Canadian Society of Corporate Secretaries (CSCS) ensured that our members were consulted and their views taken into consideration in this comment process.

    To that end we held a series of cross-country meetings during the months of March and April in Montreal, Toronto, Edmonton, Calgary and Vancouver, to obtain our members’ views on the impact of the proposed changes.  We invited representatives from the AMF, the OSC, the ASC, and the BCSC to provide detailed presentations on the proposed regime.  In all close to 200 participants attended these sessions, and their views were included in our comment letter which was submitted to the CSA in response to their request for comments.

    Click here to view the CSCS comment letter to the CSA.

     Click here to view Proposed New Governance Rules

  • 31 Mar 2011 9:33 PM | GPC Webmaster (Administrator)

    In conjunction with the changes proposed to NI 54-101 in 2010, CSCS surveyed our members to get their views on proxy voting system issues. Here we provide an overview of the key comments and concerns of CSCS members.

    CSCS members overwhelming agree that there are significant issues in the Canadian proxy voting system that must be addressed through revised regulation, including: overall complexity of the system; Difficulty communicating directly with shareholders; and inability to ensure that the votes that should count are the votes that do count

    CSCS has recommended that the OSC take an active role with the Canadian Securities Administrators and the regulators responsible for related corporate legislation to review the proxy voting system with the intention of proposing new regulations aimed at improving and simplifying the mechanisms and processes.

    CSCS also asked our members for their views on the treatment of beneficial and registered owners. The members overwhelmingly support equal treatment of both beneficial and registered owners.

    Accordingly, we strongly recommended that the OSC, together with the CSA and other securities and corporate regulators in Canada review existing legislation to address the current imbalances and ensure equality, fairness, simplicity and clarity for all stakeholders including shareholders, issuers, market professionals, and their agents, including transfer agents and proxy agents.

    We have deliberately chosen to address only the issue of the proxy voting system as we believe it is the most important issue to be addressed by regulators on behalf of shareholders and corporate Canada.

    To view the full response letter from CSCS to the OSC, click here.

  • 17 Feb 2011 9:29 PM | GPC Webmaster (Administrator)

    The Canadian Society of Corporate Secretaries (CSCS) engages with Canadian securities regulators to ensure our members’ interests are represented. We are now responding on behalf of our members to the request for comments on the proposed revisions to 51-102F6 – Statement of Executive Compensation.

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