As a new year begins, it is always a good time to take stock of
the successes of the past year and look forward to doing even
better in 2015. Shareholder activism will continue to be a
"hot topic" for publicly listed issuers in 2015, but what
lessons from the activism arena translate to companies that are not
publicly listed? Here is a checklist of our top 5 tips to help
ensure a smooth year to come:
Effective communication of corporate strategy to
employees, customers and the public – Having a great
strategy that no one knows about will not help your business.
Whatever the industry, it is important that key internal and
external stakeholders are regularly kept informed of key decisions
and strategic next steps. A lack of effective internal or external
communication can lead to misunderstandings in the future about
corporate direction or opportunities (or the lack thereof).
It can also suggest, often unfairly, a lack of strategic focus by
the board and management team.
Knowledge about shareholder base and other key
stakeholders – It is important for boards and
management teams to ensure that they are educated about their major
shareholders and investors and their respective motivators.
Similarly, if thinking about partners for M&A activity, new
financing commitments, lenders or any other counterparties, think
about their interests: Are they supportive of long-term strategies,
or more likely to want to realize quicker results? Are they
cautious or aggressive? Not being aware of the motivations and
goals of its key stakeholders leaves a company in a reactive rather
than proactive mode.
compensation – Regardless of the industry, the
compensation of a company's top talent is always a key issue
for boards, management and investors alike. Ensuring that executive
compensation, including salaries, bonuses and change of control
payments, is in line with performance and peer groups, and is
driving appropriate behaviours and strategies, is of critical
importance. This directly affects company performance and ensures
that top talent is attracted and retained by the
Board oversight of risks – There is an
ever-increasing environment of risk mitigation and management,
including continued emphasis on "risk oversight" by
boards. It is helpful to have a robust risk identification,
assessment and mitigation process in place (the details of which
will, of course, be industry-specific). Setting a "tone at the
top" of canvassing potential risks and having open discussions
about risk mitigation strategies at the board and management level
will help improve governance, and hopefully leave the company less
vulnerable to issues in the future.
Crisis response action
plan – In the unfortunate event that a
corporate crisis presents itself, it is helpful to ensure that a
well-thought out plan of immediate steps, together with a list of
key contacts and advisors, is prepared. It is also a good idea to
routinely consult and review the company's constating
documents, including articles of incorporation and by-laws, and
other key corporate policies and procedures to ensure that they are
being followed and are not in need of updates or revision.
Norton Rose Fulbright Canada LLP
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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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