TORONTO, June 24, 2014 /CNW/ - The Institute of Corporate Directors (the
"ICD") today announced that it has submitted a comment letter to the
Canadian Securities Administrators (CSA) regarding Proposed National
Policy 25-201 Guidance for Proxy Advisory Firms (the "Proposed
Policy"). The Proposed Policy was published by the CSA on April 24,
2014 to address certain concerns raised by market participants about
the services provided by proxy advisory firms and their potential
impact on Canadian capital markets.
"The increasing influence of proxy advisory firms on corporate
governance practices is of great importance to directors in Canada, and
our members encourage the CSA to take further steps to alleviate the
tensions we are currently experiencing regarding the roles and
responsibilities of these organizations," said ICD President and CEO
In addition to the guidance provided by the CSA in the Proposed Policy,
ICD proposes three further recommendations in areas where it feels
guidance alone will not address the concerns held by many capital
market participants regarding proxy advisory firms, including issues of
conflicts of interest, standards of training and experience, and
dialogue with issuers.
Conflict of Interest. ICD believes proxy advisory firms should be precluded from issuing a
voting recommendation on a particular matter where that firm has
provided consulting services to the issuer or the firm's
investor-client or owner has a material interest.
Standards of Training and Experience. The industry should be committed to a minimum-level of training for
analysts and be required to disclose this training.
Dialogue with Issuers. Proxy advisory firms should be required to discuss contrary
recommendations with the issuer in advance of a report's completion and
provide sufficient time for the issuer to include a response in the
materials that are provided to the proxy advisory firm's clients.
"We commend the CSA for addressing this important issue and, on behalf
of our 8700 members across Canada, we welcome the opportunity to
contribute to finding solutions that are in the best interests of all
capital markets participants," added Mr. Magidson.
The full ICD comment letter can be viewed at: www.icd.ca/policy.
About The Institute of Corporate Directors (ICD)
The Institute of Corporate Directors (ICD) is a not-for-profit,
member-based association representing Canadian directors and boards
across the for-profit, not-for-profit, and Crown sectors. The ICD has
more than 8,700 members and 11 local chapters across Canada. The ICD
fosters the sharing of knowledge and wisdom through education,
professional development programs and services, and thought leadership
and advocacy to achieve the highest standard of directorship. For more
information, please visit: www.icd.ca.
SOURCE: Institute of Corporate Directors (ICD)
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