In March of this year, the Canadian Coalition for Good
Governance (CCGG) published new guidelines for Building High Performance Boards
(Guidelines). The original guidelines were introduced in 2005.
Significant new commentary has been added in respect of risk
management, and the Guidelines demonstrate an increasing emphasis
on shareholder engagement by boards of directors as reflected in
model shareholder engagement and say-on-pay policy.
The Guidelines focus on developing high performance boards that
are (1) accountable and independent; (2) have experienced,
knowledgeable and effective directors and committees; (3) have
clear roles and responsibilities; and (4) engage with shareholders.
The CCGG encourages corporate boards and executives to continually
assess whether their governance practices are enhancing shareholder
The Guidelines were developed after consultation with Canadian
directors and issuers, governance experts, lawyers and compensation
consultants. The expectation is that Canadian reporting issuers
will adopt these Guidelines over and above the minimum standards
required by the Canadian Securities Administrators and corporate
law. As global governance practices evolve, they will periodically
revise the guidelines to ensure they stay modern and relevant.
There are thirteen Guidelines, each of which is based on the
four principles above. They are as follows:
A high performance board is accountable and
Guideline 1 — Facilitate Shareholder
Guideline 2— Ensure at least
two-thirds of directors are independent of management.
Guideline 3— Separate the roles of
chair and CEO.
A high performance board has experienced, knowledgeable
and effective directors and committees, and the highest level of
Guideline 4— Ensure that directors
are competent and knowledgeable.
Guideline 5— Ensure that the goal
of every director is to make integrity the hallmark of the
Guideline 6— Establish mandates for
board committees and ensure committee independence.
Guideline 7— Establish reasonable
compensation and share ownership guidelines for directors.
Guideline 8— Evaluate board,
committee and individual director performance.
A high performance board has clear roles and
Guideline 9— Oversee strategic
planning, risk management and the hiring and evaluation of
Guideline 10— Assess the CEO and
plan for succession.
Guideline 11— Develop and oversee
executive compensation plans.
A high performance board engages with
Guideline 12— Report governance
policies and initiatives to shareholders.
Guideline 13— Engage with
shareholders within and outside the Annual General Meeting.
For a more detailed discussion of the new CCGG guidelines, and
in particular, expected best practices for each guidelines, click
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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