Canada's securities regulators have published National
Policy 25-201 - Guidance for Proxy Advisory Firms. The
policy addresses concerns expressed by public companies and other
market participants about potential conflicts of interest and a
perceived lack of transparency in the work of proxy advisory firms,
whose advice may influence the outcome of shareholder votes.
What You Need To Know
The policy is a set of recommendations for good practices by
proxy advisory firms (PAFs). None of the practices are
Conflicts of Interest. A PAF's board of directors
or senior management should implement policies and procedures,
including a code of conduct, to mitigate conflicts. Actual or
potential conflicts should be communicated to clients in a timely
Voting Recommendations. These should be determined in
a consistent, transparent manner. Research methods and data
gathering practices should aim to reduce the risk of factual
errors. Clients should be informed of (i) any deviations from the
PAF's proxy voting guidelines and (ii) the nature of any
dialogue with the issuer or other stakeholders.
Proxy Voting Guidelines. These should be developed in
consultation with clients and other stakeholders, taking into
account market conditions and issuers' characteristics. Proxy
voting guidelines and any updates should be publicly available,
with an explanation of their rationale.
Communication with Clients and the Market. Voting
recommendations should be accompanied by an explanation of the
PAF's analysis and approach. PAFs should appoint contact
persons to answer questions and receive complaints from
stakeholders. PAFs should have comprehensive websites that describe
their internal policies and procedures, including their hiring and
employee training practices and their methods of engaging with
The SEC has also declined to impose mandatory requirements on
PAFs. Instead, SEC staff issued a bulletin last year (i) reminding
investment advisors that they cannot delegate to PAFs their
fiduciary duty to vote in clients' best interests and (ii)
reminding PAFs of their duty to inform clients of conflicts of
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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