Category Archives: Views

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Balancing disclosure and defence

Not all activists are bad and not all companies are good—but an early warning system without a 5% disclosure threshold leaves issuers unfairly disadvantaged and underprotected
By Chaya Cooperberg
December 18th, 2014

At a recent Ontario Securities Commission event in Toronto, celebrity hedge-fund manager Bill Ackman of Pershing Square Capital noted that Canada is a more accommodating environment for shareholder activists than the U.S. “It’s a better regime in almost every measure,” … Continue reading

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Out with the old

Canada’s corporate governance guidelines, enacted in 2005, are woefully out of date. The world, and the world of governance, have changed dramatically since then. Worse, our deficiencies hurt and are holding us back
By Richard Leblanc
December 18th, 2014

In my teaching, research and consulting, I no longer use National Policy 58-201 Corporate Governance Guidelines (enacted June 17, 2005), which applies to publicly traded companies in Canada, as an example of exemplary corporate governance. I regard it as stale … Continue reading

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Monitoring strategic risk

There is no substitute for director vigilance in assessing strategic risk. To help that process along, boards can choose from a series of specific monitoring practices to ensure thorough and effective oversight
By John Caldwell
December 18th, 2014

The increasing trend in quarterly board materials is to use stoplight type graphics to demonstrate the state of an enterprise’s risk universe, highlighting areas of increasing exposure. Yet this analysis tends to be superficial, failing to provide sufficient early warnings … Continue reading

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Not yet in Canada? Pity

Proxy access is a corporate governance game changer that needs to take hold in this country. Its adoption would directly lead to better boards and better-performing companies
By Richard Leblanc
October 30th, 2014

I teach my students and counsel board clients that shareholders elect directors; directors appoint managers; directors are accountable to shareholders; and managers are accountable to directors. This is largely theoretical. Here is the reality: shareholders cannot select directors, cannot communicate … Continue reading

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What did we learn again?

The lessons of 2008 and the consequences of loose credit and too much debt have barely been written. Yet judging by the latest leverage ratios and reemerging risky lending instruments, they’re already being forgotten
By Robert Olsen
With Andrew Luetchford
October 30th, 2014

When I was in business school 25 years ago, most of the cases we studied were written in the early ’80s and many of them featured companies that suffered financial duress from high interest rates and over-leveraging. It occurred to … Continue reading

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Own the pay-for-performance narrative

A board’s best defence in the say-on-pay era? Conduct an independent pay-for-performance assessment, then communicate it to your shareholders
By Ken Hugessen
With Lisa Oldridge
October 30th, 2014

Shareholders are interested in ensuring compensation is aligned with performance, and they use say-on-pay votes and director elections to express concerns where this is not seen to be the case. Unfortunately, many issuers fail to provide compelling evidence of a … Continue reading

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Competition: the greatest external risk

Obtaining a deep, objective understanding of competitors’ strengths and weaknesses—analyzing everything from their current strategies to ability to execute—is fundamental to assessing risk and driving your own performance
By John Caldwell
October 30th, 2014

Excluding self-inflicted exposures, competition is usually an enterprise’s greatest threat. Yet, ironically, management and board rigour around competitive analysis is often perfunctory at best. Quarterly board packages frequently contain cursory information on competitor activities. Even most strategic plans fall woefully … Continue reading

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Business with purpose

Pending the results of an Industry Canada review, benefit corporations—for-profit businesses using the power of business to solve social and environmental problems—could soon be legally entrenched
By Sandra Odendahl
October 30th, 2014

Last December, when the federal government launched a review of the Canada Business Corporations Act (CBCA), topics like shareholder rights and executive compensation grabbed much of the spotlight. But among potential changes that might have the biggest lasting impact, consider … Continue reading

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Spare the paper, boost the engagement

Notice and access is making slow progress in Canada since it was approved in 2013. But wherever it’s applied, shareholders show they are ready for new channels for proxy communication
By Chaya Cooperberg
October 30th, 2014

In a recent conversation with four other investor relations officers, each representing a sizeable Canadian public company, the topic of notice and access came up. Of the five of us, only two were early adopters of the process introduced in … Continue reading

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Insiders dish on deadwood directors

Not every board wants to hear it, but the message from the market, shareholders and savvy insiders is clear: renew your directors or others will do it for you
By Richard Leblanc
August 27th, 2014

Board composition is one of the most critical issues for companies and their shareholders today. This top-10 list of recommended practices—backed by candid commentary—is based on 40 recent director and executive interviews and ongoing advice and assessment provided to activist … Continue reading

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Gearing up for an analyst day

There are many good reasons to hold an analyst day, and just as many not to. Here are some signs that your company may be ready—and some tested advice on making it a success
By Chaya Cooperberg
August 27th, 2014

After more than a half-dozen years leading investor relations at a large-cap industrials company based in Toronto, I finally recommended to our executive team last year that we hold the company’s first analyst and investor day this past spring. Why … Continue reading

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Aboriginal business: open for partnerships

Increasing participation by conventional lenders and a range of innovative government funding programs are helping aboriginal businesses in Canada gain traction. But challenges remain
By Robert Olsen
With Romit Malhotra
August 27th, 2014

There is a noticeable increase in the amount of discussion taking place around aboriginal matters in Canadian business circles. These tend to revolve around aboriginal communities’ stake in resource development and pipeline projects, the significant wealth and land transfer projected … Continue reading

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Shareholder proposals reflect evolving concerns

The frequency of shareholder proposals and their levels of support are gradually gaining steam in Canada. Directors are wise to pay heed. If your board isn’t a target today, it might be tomorrow
By Ken Hugessen
With Michelle Tan
August 27th, 2014

Directors and executives are increasingly aware of the trend towards increasing engagement with shareholders. It runs the spectrum from relatively civilized dialogue behind closed doors to fractious proxy contests. Somewhere in between is a third form of engagement: shareholder proposals. … Continue reading

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Talent gaps: a significant organizational risk

Companies often complain they can’t hire enough good people for important roles. More than frustrating, it’s a business risk that boards can and should address
By John Caldwell
August 27th, 2014

Two years ago in this column, I asserted that because the chief executive officer position carries with it the most critical and broadest responsibilities in the corporation, an ineffective CEO poses one of the greatest risks to the enterprise. But … Continue reading

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Beyond the carbon bubble

Responsible investors and activists sounding the “unburnable carbon” alarm might do better to focus on energy companies’ responses to the risk of slowing demand for fossil fuels
By Sandra Odendahl
With Peter MacConnachie
June 5th, 2014

If you don’t already know what a stranded carbon asset is, you soon will. Stranded carbon assets, “unburnable carbon” and the “carbon bubble” are part of an emerging framework for looking at energy, climate change and investment. First outlined in … Continue reading

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