INDU Committee Report

NDP Opinion on the Statutory Review of the Canada Business Corporations Act (CBCA)

After hearing from stakeholders representing a diverse range of interests the need to modernize and update the CBCA was made readily apparent. While the recommendations put forward by witnesses appearing at the committee were not able to obtain a consensus or even a majority of the committee members’ support, the NDP has determined to recommend the following changes to be incorporated into the CBCA.

Recommendations

Executive Compensation

(1)          Shareholders should have an advisory vote on compensation packages.

Shareholder Rights and Governance

(2)          That section 102 of the CBCA be expanded to require that the directors of a distributing corporation shall disclose the board’s understanding of the impacts and potential impacts of social and environmental matters on the company’s operations

(3)          That section 141 of the CBCA be amended to require that voting on all resolutions considered at a meeting of shareholders be conducted by ballot. The CBCA should require public companies to disclose the detailed results of shareholder votes for matters on the ballot.

(4)          That section 106 of the CBCA be amended to require the individual election of directors. The CBCA should prohibit slate voting and require a director by director vote.

(5)          That section 106(3) of the CBCA be amended to eliminate the availability of terms of greater than one year for directors. The CBCA should require annual director elections for all CBCA public companies.

(6)          That section 106 of the CBCA be amended to require majority voting in the election of directors.

(7)          That section 132(5) of the CBCA be amended to exclude publicly-traded corporations from its application.

(8)          That section 137(5)(a) of the CBCA be amended to establish the reference date for determining the filing deadline for a shareholder proposal as the anniversary date of the previous annual meeting of shareholders.

(9)          That section 137 of the CBCA be amended to require that shareholders presenting proposals are given a reasonable period of time to speak.

(10)       The CBCA should be amended to give significant shareholders access to the proxy circular

(11)       The CBCA should require all shareholders to be treated equally in the proxy process, irrespective of whether they want to protect the privacy of their information

(12)       The CBCA should facilitate “notice and access,” i.e. allowing shareholders to access and download document from the company website to facilitate proxy voting

(13)       The CBCA should generally require the separation of the roles of the Chief Executive Officer (CEO) and the Chair of the board

(14)       The CBCA should require shareholder approval for significantly dilutive acquisitions

(15)       The Committee should devise ways to give shareholders more meaningful ways to resolve claims under the oppression remedy

Securities Regulation

The NDP recommends that the Government of Canada work with the provinces to harmonize securities regulation.

Proposal for Special Incorporation Structure for Socially Responsible Enterprises

(16)     Amend the CBCA and possibly create a separate regulator to support a special kind of hybrid enterprise with both profit-making and non-profit goals, similar to a Low Profit Limited Liability Corporation (L3C) in the United States and a Community Interest Company (CIC) in the United Kingdom.