Canada: ISS And Glass Lewis Release 2016 Canadian Proxy Voting Guidelines

Last Updated: November 30 2015
Article by Laura Costen and Jason M. Saltzman

Most Read Contributor in Canada, September 2016

Institutional Shareholder Services ("ISS") and Glass, Lewis & Co., LLC ("Glass Lewis"), two leading proxy advisory firms, recently released updated guidelines for the 2016 Canadian proxy season. Many of the revisions focus on director responsibility and accountability. Given the influence that ISS and Glass Lewis have on voting, issuers should be cognizant of these guidelines and their potential implications. For the ISS guidelines update, see here. For the Glass Lewis guidelines update, see here.


The ISS "Canada Proxy Voting Guidelines Updates" modifies ISS' approach to overboarded directors, board accountability at externally-managed issuers ("EMIs"), and equity compensation plans.

Director Overboarding

ISS redefined "overboarded," such that it will consider a director overboarded if he or she is a CEO and sits on more than one public company board (reduced from the current threshold of two) or if he or she is not a CEO and sits on four or more public company boards (reduced from the current threshold of five). These changes will be effective in February 2017, at which point ISS will generally recommend withholding votes for a director nominee who exceeds the new "overboarded" thresholds and who has attended less than 75% of his or her respective board and committee meetings in the past year without a valid reason for such absences.

Board Accountability at EMIs

ISS will implement a new framework for reviewing board accountability at EMIs where disclosure of any management services agreements and management compensation is limited or insufficient. ISS will recommend voting on a case-by-case basis on say-on-pay and director election resolutions where an EMI has provided inadequate disclosure of its management services agreements or senior management compensation. In making its voting recommendation, ISS will consider various factors, including compensation compared to issuer peers, executive responsibilities and overall performance.

Equity Compensation Plans

ISS introduced a scorecard model, the Equity Plan Scorecard, similar to the model it introduced in the United States in 2015, by which ISS will evaluate equity plans for issuers listed on the Toronto Stock Exchange ("TSX"). The scorecard will be based on plan cost, plan features, and grant practices. ISS will generally recommend voting against equity plans that have overall scores that indicate that they are not in shareholders' best interests. In addition, regardless of score, ISS will generally recommend voting against equity plans if certain issues are identified, including, discretionary or insufficiently limited non-employee director participation, an amendment provision that does not adequately limit the issuer's ability to amend the plan without shareholder approval, a company that has repriced stock options without shareholder approval within the past three years, a plan that is a vehicle for problematic pay practices or significant pay-for-performance inconsistencies, or any other plan features that may detrimentally affect shareholder interests.

Glass Lewis

The Glass Lewis "Proxy Paper Guidelines 2016 Proxy Season" updates its previous guidelines regarding the following issues.

Director Overboarding

Glass Lewis has also amended its definition of "overboarded." Commencing in 2017, it will generally recommend withholding votes from directors who are executives of public companies while sitting on more than two boards (reduced from the current threshold of three) and from non-executive directors who sit on more than five boards (reduced from the current threshold of six). Glass Lewis will not revise its general recommendation in 2016, but will review director board commitments and note directors exceeding the new thresholds as a going concern.

Environmental and Social Risk Oversight

Glass Lewis codified its policy regarding the responsibility of directors for environmental and social issues. If Glass Lewis perceives that a board or management has failed to sufficiently identify and manage a material environmental or social risk that could reduce shareholder value, it will recommend that shareholders withhold votes from directors who were responsible for risk oversight.

Nominating Committee Performance

Glass Lewis revised its guidelines to provide that it may recommend withholding votes from the chair of a nominating committee if the board's failure to ensure that the directors have relevant experience has contributed to the company's poor performance.

Director Quorum

Glass Lewis augmented its discussion of quorum requirements to include a requirement for quorums at director meetings as well as at shareholder meetings. Glass Lewis will generally accept that a majority of directors of a board constitutes an acceptable quorum for a meeting of directors.

Audit Committee Over-Commitment

Glass Lewis has generally recommended withholding votes from audit committee members who sit on an "excessive number" of public company audit committees. Going forward, Glass Lewis will consider a director of a TSX Venture Exchange-listed company to sit on an "excessive number" of audit committees if the director either has financial experience and sits on more than five audit committees or does not have such experience and sits on over four committees, and will generally recommend voting against these individuals. The threshold for a director of a TSX-listed company will remain the same as Glass Lewis will consider a director of a TSX-listed company to sit on an "excessive number" of audit committees if the director either has "demonstrable" financial experience and sits on more than four audit committees or does not have such experience and sits on over three committees.

Proxy Access

Glass Lewis clarified that it generally supports proxy access, which permits certain shareholders to nominate directors and to have such nominees included on the ballot. However, Glass Lewis will consider many factors when determining whether to recommend voting for a bylaw amendment to adopt proxy access, including the minimum ownership and holding requirements necessary for a shareholder to be entitled to nominate a director.

Exclusive Forum Provisions

Glass Lewis has noted that charter or bylaw provisions that limit shareholders' choice of legal venue are generally not in the best interests of shareholders. It will generally recommend that shareholders vote against a bylaw or charter amendment seeking to adopt an exclusive forum provision unless the company provides a compelling argument explaining why the provision would directly benefit shareholders, proves abuse of legal process in other jurisdictions, narrowly adapts the provision to the risks involved, and maintains good corporate governance practices.

Dual-Listed Companies

Glass Lewis clarified that when deciding which of its country-specific policies is to apply to dual-listed companies, it will determine what governance standards are most applicable to the issuer by considering various factors, including primary exchange listing, corporate governance structure and company features.

About BLG

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

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.