Governance Canada

Discussion + Information on Governance in Canada
name

IN DEFENCE OF THE OSC

Criticism of the Ontario Securities Commission’s intervention in the Home Capital affair is misguided and misinformed.

Full Document | Email This Post | Print This Post Print This Post

Continue Reading

Canadian Public Accountability Board’s Inspection Findings Should Be Disclosed to Audit Committees

The critical roles of audit committees in overseeing the external auditor and in contributing to audit quality and integrity of financial reporting have been restrained by the failure of the Canadian Public Accountability Board (CPAB) to permit the disclosure of its inspection findings of external auditors to audit committees. Audit committees should have the legal right to receive CPAB’s inspection findings from their external audit firms in order effectively to oversee their external auditors and to evaluate the quality of the audit of their financial statements.

Full Document | Email This Post | Print This Post Print This Post

Continue Reading

Deficient Governance Model @ Research In Motion

Jim Balsillie was the Chairman of the Board and Co-CEO when Research in Motion Limited (“RIM”) went public in 1997. Balsillie resigned as Chair in March 2007 with the release of the report on the improper option granting and backdating practices that RIM had been engaged in for 10 years from 1996 to 2006. On May 17, 2007, RIM announced that: “Consistent with current best practices in corporate governance, the roles of Chairman and CEO have been separated.” An independent director was appointed as Lead Director, but a new and independent Chair of the Board was not appointed and the position remained vacant, notwithstanding the election of four new independent directors in 2007. As part of the penalties and sanctions approved by the OSC in settling the improper option practices, which the OSC called a “fundamental failure of governance”, Balsillie was forced to resign as a director of RIM in February 2009. A report on RIM’s corporate governance by an independent consultant that was mandated by the OSC recommended the separation of the Chair and the CEO. The office of the Chairman of the Board of RIM, however, remained vacant as the RIM board responded in April 2010 that the absence of an independent Board Chair did not adversely affect RIM’s “highly independent board structure”. Balsillie was reappointed to the board in May 2010. Notwithstanding RIM’s earlier public representations that the roles of Chairman and CEO were separated, the independent directors agreed, “as an appropriate and effective leadership structure”, to the appointment of Balsillie and Mike Lazaridis as Co-Chairs of the Board and Co-CEOs of the company on December 16, 2010. Investors and shareholders strongly objected to this unusual governance structure of dual and joint appointments as Co-Chairs and Co-CEOs and actively pressured for the separation of the roles of Chair and CEO and the appointment of a non-management and independent Chair. On January 22, 2012, RIM announced that Balsillie and Lazaridis had resigned these combined offices and a new independent, non-management Chair of the Board and a new President and CEO of RIM were appointed.

Full Document | Comments | Email This Post | Print This Post Print This Post

Continue Reading

OSC PROPOSALS FOR NO-CONTEST SETTLEMENTS

The OSC requested comments on its proposals to introduce a new No-Contest Settlement program whereby those accused of breaching securities law could consent to a settlement of the allegations “without admitting or denying” any wrongdoing. The Emerson Advisory comment letter acknowledged the benefits of additional remedies for the OSC’s enforcement arsenal to protect investors and to foster fair and efficient capital markets. Concerns to be addressed included: (1) what are the principles and standards to be applied in approving No-Contest Settlements negotiated by the OSC staff?; (2) should it be required that, in addition to being “in the public interest”, the settlement should be objectively fair, reasonable and adequate to the public?; (3) should No-Contest Settlements be approved where there is a reasonable expectation that the settlement would adversely affect the rights of investors who have suffered loss to seek redress in civil actions?; (4) as the OSC is a multi-functional integrated agency that investigates, prosecutes and judges securities violations, should No-Contest Settlements be approved by an independent administrative authority?; and (5) are the policies, processes and procedures of the OSC concerning the administration of No-Contest Settlements clear, open, public and transparent?

Full Document | Comments | Email This Post | Print This Post Print This Post

Continue Reading