March 31 is the deadline for comments to the OSC on the questions it raised in OSC Staff Notice 54-701 Regulatory Developments Regarding Shareholder Democracy Issues (the "Staff Notice"). In summary, the Staff Notice asks for comments on the following issues:
- whether reforms to securities laws are appropriate to facilitate individual director and majority voting for director elections of reporting issuers;
- whether a shareholder advisory vote on executive compensation (Say-on-Pay) should be mandated; and
- the effectiveness of the proxy voting system in Canada.
A copy of the Staff Notice is available at:
http://www.osc.gov.on.ca/en/SecuritiesLaw_rule_20110110_54-701_reg-proposal.htm
It is particularly important that issuers and investors respond to the Staff Notice to encourage the OSC to undertake a rigorous review of the proxy voting system in Canada. In October of last year, Davies released a discussion draft titled The Quality of the Shareholder Vote in Canada. That paper explains how the proxy voting system works and highlights a number of areas of significant concern. A copy of that paper and its executive summary is available at www.shareholdervoting.com.
We encourage everyone with an interest in the integrity of the proxy voting system to respond to the OSC's request for comments. Comments should be submitted as follows:
John Stevenson
Secretary
Ontario Securities Commission
20 Queen Street West
19th Floor, Box 55
Toronto, Ontario M5H 3S8
Fax: 416.593.2318
Email: mailto:jstevenson@osc.gov.on.ca
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