Corporate Governance Documents to Emerge from the Shadows – TSX Proposes Web-Site Disclosure
Pretty soon, Canadian public companies will need to pay a little closer attention to the content, and the look and feel, of their corporate governance documents. The Toronto Stock Exchange has recently published proposed amendments to its rules that will, if adopted, require listed issuers to post their corporate governance documents on their web-sites. As such, given that shareholders will soon be able to review a listed issuer’s corporate governance documents, listed issuers would be wise to review their corporate governance documents in advance of the adoption of the new rule to determine if they align with best practices, as modified as appropriate to meet the company’s unique circumstances. Listed issuers would also be wise to high grade the physical appearance of the documents to ensure they give shareholders the right impression as to the degree of serious with which the company treats corporate governance.
The proposed new TSX rule is open for comment until May 8, 2017. Given that this latest proposal is actually only a refinement of an earlier proposal made by the TSX in May 2016, and given the relatively short comment period, I expect that the proposal will be likely be adopted shortly following the expiry of that comment period (i.e. sometime in the next few months).
Specifically, the proposed new rule would require each listed issuer to maintain a publicly accessible website and post the listed issuer’s current, effective versions of the following documents (or their equivalent), as applicable, on that web-site:
(a) articles of incorporation or any other constating or establishing documents of the issuer and its by-laws; and
(b) if adopted, copies of the issuer’s:
- majority voting policy,
- advance notice policy,
- position descriptions for the chairman of the board, the lead director, and key officers,
- board mandate, and
- board committee charters.
The webpage(s) containing the above noted documents should be easily identifiable and accessible from the listed issuer's home page or investor relations page.
Invitation for Discussion:
While appropriate securities laws and stock exchange rules are very important to the preservation of confidence in our Canadian capital markets, compliance with those laws can be a confusing and time-consuming task without the right guidance. Time spent on compliance is time spent distracted from pursuing your more important business goals that will ultimately create shareholder value. Our firm has an abundance of experience with these rules and can provide you with very practical advice to guide you through this complex minefield in a time efficient manner and with piece of mind. If would like to discuss this proposed new TSX rule, or any other Canadian securities law matter, please do not hesitate to contact one of the lawyers in the business law group at Shea Nerland LLP.
Note that the foregoing is for general discussion purposes only and should not be construed as legal advice to any one person or company. If the issues discussed herein affect you or your company, you are encouraged to seek proper legal advice.