Specifically, under proposed National Policy 25-201, proxy
advisory firms would be expected to identify, manage and mitigate
actual or potential conflicts of interest. The proposed guidance
includes specific steps firms should consider to address such
conflicts, including by establishing policies and procedures,
internal safeguards and controls, and a code of conduct. Firms
would also be expected to disclose conflicts of interest to
Further, the CSA would expect proxy advisory firms to implement
appropriate practices to promote transparency and accuracy of vote
recommendations, including by potentially establishing and, to the
extent possible considering the sensitivity of such information,
disclosing the approach or methodologies used in the analysis
leading to vote recommendations. Firms would also be encouraged to
establish internal safeguards and controls to increase the accuracy
and reliability of information and data used in the preparation of
such recommendations. The guidance would further encourage firms to
establish and disclose, again to the extent possible, the process
followed in developing proxy voting guidelines.
Meanwhile, in response to concerns from issuers that proxy
advisory firms have become de facto corporate governance
standard setters, the proposed guidance reminds issuers that they
may engage shareholders to address concerns that issuers have
practices that differ from the standards set out in proxy advisory
firms' proxy voting guidelines.
The CSA is accepting comments, including responses to a number
of specific questions set out in the proposal, until June 23,
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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