Jan 30, 2017
The proposed amendments to the Canada Business Corporations Act (the CBCA) under Bill C-25 would update Canada’s legal and regulatory framework for federally incorporated corporations, according to an article by Elizabeth Raymer in Canadian Lawyer. But some of these proposed amendments are cause for concern, including a proposed new majority voting rule, according to Osler partner Andrew MacDougall, who specializes in corporate governance and executive compensation. Andrew tells Canadian Lawyer he “regrets the loss of dialogue” that would ensue if the rule were to pass.
“And that loss of dialogue is a significant loss, I think, because it precipitated a conversation that needs to happen between boards and shareholders,” Andrew tells Canadian Lawyer. “With the [proposed] election standard … there’s no debate, there’s no discussion, there’s no feedback as part of that process.”
Another cause for consternation, according to Andrew, is the wording for the proposed new “notice and access system,” which would replace the CBCA’s requirement for paper-based communications.
“The legislative change is to allow the director to grant an exemption on any terms that she might think fit on annual meeting delivery requirements,” Andrew tells Canadian Lawyer, “whereas the statute should provide authority to prescribe by regulation that if you’re complying with notice and access under securities laws, there should be absolutely no need to apply for relief under the corporate statute.”
The article also outlines other proposed amendments to the CBCA — including updates to diversity reporting requirements — and what has been left out of Bill C-25.
For more information, read Elizabeth Raymer’s article “Modernizing federal corporate law” in Canadian Lawyer.