Coalition for Good Governance (CCGG) recently published its
2009 edition of Best Practices in Disclosure of Director Related
Information, a guide intended to "improve disclosure about
directors." According to the CCGG, the purpose of the document
is to "recommend disclosure practices that exceed the minimum
requirements set out in the regulations." The guide also
states that the most effective disclosure is easy to find and
understand, accurate and complete and given in a context that gives
the information meaning. Specifically, the guide deals with
disclosure of director-related information in five separate
sections, as outlined below.
Section A – Shareholder voting
This section discusses the methods of voting for directors
preferred by the CCGG. An example of a form of proxy considered to
be a "best practice" is included as well a list of
issuers who have adopted a majority voting policy for their
director elections. As the CCGG has previously stated, it
recommends individual director voting using a checkbox to indicate
voting preference (vote "for" or "withhold")
along with adoption of a majority voting policy. The CCGG also
recommends that a report of voting results should be posted on
SEDAR within 10 business days of an AGM and should include the
results based on the number of proxy votes cast for or withhold
from the election of directors and auditors, along with those cast
for or against any company or shareholder sponsored resolutions.
There is also a discussion on the results from the CCGG's
annual study on voting methods. Among other results highlighted
from the study, the guide notes that 74% of companies in the
S&P/TSX Composite Index now allow their shareholders to vote
with respect to individual directors (contrasted with the 26% that
still employ slate voting).
Section B – Director
Section B provides guidance for companies that want to adopt
"exemplary" disclosure practices and provides examples of
how certain issuers have chosen to communicate information on
matters such as director selection and orientation, background,
share ownership, compensation and performance assessment. The CCGG
encourages issuers to either adopt or adapt these disclosure
Section C – Proxy circular
Section C includes examples of enhanced proxy circular layout.
Best practices include one page summaries for each section of the
proxy, section summaries within the discussion on corporate
governance and the use of summary tables for committee reports.
Section D – Innovations
In the 2009 guide, innovative disclosure practices have been
incorporated into the guide as best practices where feasible.
Section D provides examples of innovations in disclosure practices
adopted by various companies, including disclosure regarding the
year-over-year changes in share holdings for the board as a
Section E – Guide to providing "best
practice" disclosure checklist
Section E consists of a checklist that issuers can use to
compare their disclosure practices against the CCGG's
"best practices" and is a meant as a tool for drafting
2010 proxy disclosure.
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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