56 LEXPERT MAGAZINE
|
MARCH 2017
IN-HOUSE ADVISOR
Proposed amendments to the CBCA will bring governance rules
like majority voting into law for many companies. Are these changes
necessary? There's some doubt. Are they coming? No doubt at all
BY SHELDON GORDON ILLUSTRATION BY SÉBASTIEN THIBAULT
More Voices
AT THE TABLE
IN MAY 2015, the directors of Quebecor Inc., aer a seven-hour board
meeting in Montréal, decided against accepting the resignation of Michel
Lavigne as a company director, even though 72 per cent of shareholders
had withheld their support for him in the annual board election. Quebecor
had, the same year, adopted for the first time a majority voting policy that
required directors to submit their resignation if they failed to win a majority
of votes in board elections.
Lavigne, who headed Quebecor's compensation committee, was appar-
ently being punished by the company's shareholders for the generous sev-
erance package awarded to Quebecor's departing CEO. Quebecor's board
chair, former prime minister Brian Mulroney, explained that it was unfair
that Lavigne should alone suffer the backlash against a pay decision made by
the board collectively.
Fast-forward to September 2016: Navdeep Bains, the federal Minister
of Innovation, Science and Economic Development, introduced Bill C-25,
which if enacted will make significant changes to the corporate governance
(including director elections) of public companies incorporated under the
Canada Business Corporations Act (CBCA).
e CBCA is the incorporating statute for nearly 270,000 corporations.
Although most of these are small or mid-size and privately held, many large
businesses have incorporated under the CBCA, including almost half of
Canada's largest publicly traded companies.
