On February 13, 2014, TSX announced amendments to the TSX Company
Manual which mandate majority voting in uncontested elections of
directors for TSX-listed issuers that are not majority controlled.
The purpose of these amendments, as stated by the TSX, is to
improve corporate governance standards in Canada by providing a
meaningful way for security holders to hold individual directors
What TSX-listed Issuers Need to Know
Effective Date of the Amendments
The amendments become effective beginning June 30, 2014 and
issuers with fiscal years ending on or after June 30, 2014 must
comply with the amendments at their next annual meeting following
such date. All issuers are expected to be in compliance with the
amendments by June 30, 2015.
Majority Voting Requirement for the Election of
At the next annual meeting following a fiscal year ending on or
after June 30, 2014, directors of TSX-listed issuers that are not
majority controlled must be elected by a majority of votes cast at
a meeting (50% plus one), other than at contested meetings (the
Majority Voting Requirement).
Majority Control Exemption
A listed issuer with a majority of voting securities
beneficially owned, or controlled or directed, directly or
indirectly, by a single securityholder is exempt from the Majority
Voting Requirement. A listed issuer relying on the majority control
exemption must disclose annually in its meeting materials its
reliance on the exemption and its reasons for not adopting majority
voting for the election of directors.
Requirement to Implement a Majority Voting Policy
If the existing constating documents or applicable corporate law
of a listed issuer do not provide for the Majority Voting
Requirement in a manner satisfactory to TSX, it must implement a
policy implementing the Majority Voting Requirement (the
Majority Voting Policy), if they have not already
implemented one. A Majority Voting Policy must substantially
provide the following:
a director elected at an uncontested meeting with less than 50%
plus one of the votes cast must immediately tender his or her
the board shall consider the resignation and, within 90 days of
the meeting giving rise to the resignation, must accept it unless
exceptional circumstances warrant otherwise, and such resignation
is effective when accepted by the board;
a director who has tendered his or her resignation pursuant to
the Majority Voting Policy must not attend any meeting of the board
or any sub-committee at which the resignation is considered;
the listed issuer must issue a news release disclosing the
board's decision (a copy of which must be provided to TSX) and,
if the decision is to not accept the resignation, detailed reasons
for such decision must be provided.
If a Majority Voting Policy is adopted, it must be described on
an annual basis in the listed issuer's securityholder materials
sent in connection with meetings at which directors are to be
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global legal practice. We provide
the world's pre-eminent corporations and financial institutions
with a full business law service. We have more than 3800 lawyers
based in over 50 cities across Europe, the United States, Canada,
Latin America, Asia, Australia, Africa, the Middle East and Central
Recognized for our industry focus, we are strong across all
the key industry sectors: financial institutions; energy;
infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global
business principles of quality, unity and integrity. We aim to
provide the highest possible standard of legal service in each of
our offices and to maintain that level of quality at every point of
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia,
Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South
Africa (incorporated as Deneys Reitz Inc) and Fulbright &
Jaworski LLP, each of which is a separate legal entity, are members
('the Norton Rose Fulbright members') of Norton Rose
Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein
helps coordinate the activities of the Norton Rose Fulbright
members but does not itself provide legal services to
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).