"one-size-fi ts-all" governance standards set
by the advisory fi rms.
"! e weight that the advisory fi rms
have is akin to rule-making power, with-
out the checks and balances that other
market participants have," says Jean-Pierre
Chamberland, partner at Fasken Martin-
eau DuMoulin
LLP's Montréal offi ce. In
particular, issuers feel that the proxy fi rms
are too attentive to dissident shareholders
in preparing their reports.
In April 2014, the Canadian Securities
Administrators (CSA) proposed guidance
for advisory fi rms – Institutional Share-
holder Services Inc.
(ISS) and Glass Lewis
& Co. – to avoid confl icts of interest, im-
prove their accuracy and be more trans-
parent. ! e reforms are discretionary, but
Chamberland says the fi rms have already
started to implement several. "! ey under-
stand that if they don't, they'll be regulated
and have even less control."
A key question is whether the advisory
fi rms will provide a dra report for the com-
pany to review for inaccuracies. "A fallback
position for issuers," says Chamberland,
"would be for the advisory fi rms to include
in their fi nal report whether or not they've
consulted with the issuer and, if so, does the
issuer agree with what's in the report."
SHAREHOLDER ACTIVISM
In response to shareholder activism, some
issuers are adopting bylaws as defensive tac-
tics. Most common
is an advance notice
requirement that
shareholders give rea-
sonable notifi cation
prior to the annual
general meeting rath-
er than wait until the
meeting to propose
their own director
nominees from the
fl oor. ! e courts have
upheld such bylaws
as a contribution to
transparency and in-
formed decision-making.
"Whereas four years ago people in Can-
ada had never heard of advance notice by-
laws," says Koval at Torys, "now it's become
almost a matter of practice when you're
IPOing a company or reviewing the gover-
nance of a company to include an advance-
notice bylaw. My own view is that they serve
the existing shareholders as well as the activ-
ists well. I think it's an appropriate balanc-
ing of interests."
Less common in Canada is an enhanced
quorum for contested
AGMs where dissi-
dents wish to oust a majority of directors.
"But in order to be eff ective, they require
shareholder approval," says Jeff rey Lloyd, a
Ghikas, Matthew
Fasken Martineau
DuMoulin LLP
(604) 631-3191
mghikas@fasken.com
Mr. Ghikas is a highly
ranked energy lawyer with
expertise in the oil and gas,
electricity and utility indus-
tries. He provides strategic
advice and represents energy
clients in administrative
proceedings, litigation,
arbitration and mediation.
Glass, Jeff
Blake, Cassels
& Graydon LLP
(416) 863-4162
jeff .glass@blakes.com
Mr. Glass advises leading
investment dealers, fi nancial
institutions and wealth
management companies on
public fi nancings, govern-
ance and regulatory matters,
with extensive experience in
the structuring and regula-
tion of structured products.
Goldman, QC,
Calvin S.
Goodmans LLP
(416) 597-5914
cgoldman@goodmans.ca
Mr. Goldman, a former
Commissioner of the Com-
petition Bureau, focuses his
competition practice on
domestic and international
mergers, abuse of domin-
ance, cartels, reviewable
matters, trade practices
and foreign investment
reviews under the ICA.
Gibson, QC, Brock W.
Blake, Cassels
& Graydon LLP
(403) 260-9610
brock.gibson@blakes.com
Chair and partner. Mr.
Gibson's practice focuses on
mergers and acquisitions,
corporate fi nance, private
equity and restructuring
transactions. His experi-
ence includes acting as
lead counsel on numerous
mergers and acquisitions
and public off erings.
Godber, H. John
Borden Ladner Gervais LLP
(514) 954-3165
jgodber@blg.com
Mr. Godber focuses on
M&A, corporate fi nance,
private equity, securities
and international joint
ventures for closely and
widely held companies, and
regularly advises clients in
the infrastructure, telecom-
munications and informa-
tion technology sectors.
Goldman, Jay
Cassels Brock
& Blackwell LLP
(416) 860-6474
jgoldman@
casselsbrock.com
Mr. Goldman's securities
and corporate fi nance
practice embraces structur-
ing and negotiating M&A,
securities, joint venture and
commercial transactions. His
clients include issuers and
investment dealers/advisors,
many in the mining sector.
16
|
CORPORATE GOVERNANCE
"IT BECOMES A QUESTION
OF WEIGHING THE CONTRIBUTION
AND QUALITY THAT A DIRECTOR
BRINGS TO THE TABLE VERSUS
SIMPLY IMPOSING AN ARBITRARY
TERM LIMIT. I THINK CORPORATE
CANADA IS GOING TO CHOOSE
MORE OF THE 'EXPLAIN' [OPTION]."
– Patricia Koval, Torys LLP
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