TMX Group and ICD launching new initiative charting the future of corporate governance in Canada

Aug 14, 2020

The TMX Group and the Institute of Corporate Directors announced a new initiative aimed at charting the future of corporate governance in Canada. The role of the board has evolved and this initiative seeks to understand the impact and how guidance in this area needs to change with respect to best practices in corporate governance in Canada. Osler is proud to be participating in this initiative as part of our continued commitment to helping advance corporate governance practices in Canada.

You can read the full release below.

The business landscape is changing in fundamental ways. Corporate governance needs to keep pace and chart a course for the future. The question is: how? 

In the months ahead, TMX Group* and the Institute of Corporate Directors (ICD) will be launching an important new initiative aimed at charting the future of corporate governance in Canada. As an ICD member, Canadian capital markets participant or stakeholder, we will want your support and input to inform our work.

It has been more than 25 years since the Toronto Stock Exchange Committee on Corporate Governance published guidelines (commonly known as The Dey Report [PDF]) that continue to act as the foundation for Canadian public company board governance today.

Since that time, the role of the board has evolved significantly and new concepts of corporate purpose and director duties are surfacing. Fuelled by the rapid pace of technological innovation and against the backdrop of a global pandemic, Canadian business faces a profound and expansive new set of risks, challenges and opportunities. These include a shifting geopolitical structure, climate change and sustainability, new forms of stakeholder activism, artificial intelligence, as well as calls for enhanced equity, diversity and inclusion.

The business landscape is changing in fundamental ways. Corporate governance needs to keep pace and chart a course for the future. The question is: how?

To explore this question and oversee the creation of updated guidance with respect to best practices in corporate governance in Canada, TMX Group and the ICD are constituting The Committee on the Future of Corporate Governance in Canada.

The Committee, which will be announced this Fall, will comprise a diverse group of experienced Canadian public company directors. Its work will focus particularly on those areas of oversight where director leadership can contribute to enhanced resiliency and long-term sustainable corporate performance, while being mindful of the existing regulatory burden challenges faced by Canadian companies.

To fulfil its objective, the Committee will consult and seek input from a broad range of stakeholders, including investors, regulators, academics and other individuals and organizations. The Committee will begin its work in September and is scheduling virtual meetings for Fall 2020 and Winter 2021.

Following these meetings, an interim report will be published and issued for public consultation. The Committee encourages all stakeholders, including ICD members, with an interest in this initiative to provide feedback to this interim report, which is targeted to be issued in early 2021. ICD and TMX are very pleased to have support for this initiative from Osler, Hoskin & Harcourt LLP, which provided legal support to the original TSX Committee.

We believe that updating governance guidelines to reflect current realities and future challenges will have lasting and meaningful benefits for Canada. We look forward to communicating further when we formally launch the project and over the coming year.

Kind regards,

 

Matthew Fortier

Vice President, Policy

Institute of Corporate Directors

David Clarke

Head of Government Relations

TMX Group Limited

 

*TMX Group Limited is participating in this initiative as part of its role in Canada’s capital markets to promote long-term sustainable investment. TMX Group is committed to embracing progressive change across the markets and as such is embarking on this Committee to connect with its various stakeholders with a goal to provide recommendations on good corporate governance practices. However, we note that any views and recommendations advanced by the Committee may serve as a tool and/or guidelines for issuers listed on Toronto Stock Exchange and/or TSX Venture Exchange (the "Exchanges").

Given the Exchanges' role in regulating listed issuers, together with their responsibility for ensuring the integrity of the market and the public interest while considering the interests of multiple different stakeholders, the Exchanges are of the view that boards of directors of listed issuers are best situated to determine what, if any, of the resulting recommendations stemming from the Committee are in the best interest of their respective corporation, shareholders and other constituents. The Exchanges look forward to seeing the Committee's recommendations on enhancing corporate governance practices in Canada, and should the Exchanges decide to adopt any recommendations as an Exchange requirement for listed issuers, the Exchanges will follow the established procedures set out in the various recognition orders when seeking to amend their policies or procedures, including where applicable, publishing such changes for public comment.