The Canadian Investor Relations Institute Recommends Improvements to the Proxy Voting Process

TORONTO, Sept. 7, 2011 /CNW/ - The Canadian Investor Relations Institute (CIRI), after significant review and deliberation, today published its comments on the discussion paper entitled 'The Quality of the Shareholder Vote in Canada' that was released earlier by Davies Ward Phillips & Vineberg LLP (the Davies Paper).

CIRI strongly commends the initiative represented by the wide ranging discussion in the Davies Paper and has determined that there are several issues of specific concern to the investor relations community.

In general, CIRI agrees that the proxy voting system in place today is too complex, particularly for the limited size and scope of the Canadian capital markets compared to other jurisdictions and that this complexity contributes to market inefficiency.

"Complexity is not an excuse for ignoring the current poor state of the proxy voting process in Canada, especially given significant opportunities to benefit from advances in technology and governance practices.  However, there is a need for continued leadership on this issue," says Tom Enright, CIRI President and CEO.

CIRI is also concerned about the general lack of transparency and disclosure throughout the proxy voting system, especially when compared to the significant degree of disclosure demanded of its issuer members by both regulators and institutional investors.

Transparency of share ownership is negatively impacted by an increasing proportion of OBO (Objecting Beneficial Owner) investors electing to shield their ownership positions from the very companies from whom they demand more information, in the name of transparency.

"It seems counter-productive to continue to improve the disclosure and governance aspects of the capital markets only to have these improvements potentially lost through an inadequate proxy voting process," says Enright.

"It is important for organizations such as CIRI to voice their views and concerns with the proxy voting process," noted Carol Hansell Senior Partner, Davies Ward Phillips & Vineberg LLP.

In summary, CIRI supports the recommendation in the Davies Paper that a task force be struck to consider the key issues raised in the paper and to seek means of addressing those issues. CIRI also strongly recommends that the following points be included in the issues to be considered:

  • OBO/NOBO Concept:  The entire NOBO (Non-Objecting Beneficial Owner) and OBO (Objecting Beneficial Owner) practice should be reviewed.  If continued, the NOBO status should be the default option when establishing brokerage customer accounts and a fee should be applied against those shareowners seeking OBO status.

  • Proxy Advisory Firms:  Under a fair disclosure environment, any report/recommendation of a proxy advisory firm should be provided to the subject issuer prior to the report being issued to the proxy advisory firm's institutional clients, in a manner to provide sufficient time to provide a real and meaningful opportunity for issuers to correct factual research errors or engage in a dialogue with advisory firms if contentious issues arise.

  • Investor Responsibility to Vote:  Those who borrow shares and do not have an economic interest in the long-term welfare of the issuer, should be prohibited from voting the borrowed shares; the responsibility to vote should remain with the lending shareholder, despite shares being temporarily in the hands of the borrower.  In addition, votes on securities of specific issuer companies should have some mandated input from the portfolio managers or traders directly responsible for the decision to purchase and own the securities.

  • Replacing the Paper-Based System:  Electronic delivery should be the default option, although shareholders can elect to receive paper copies when they open a brokerage account. Electronic voting should be implemented across the board. Regulations should be drafted to encourage an orderly but time-limited transition from hard-copy paper delivery of proxy materials to electronic delivery.

A complete copy of the CIRI comment paper is available at

About CIRI

CIRI is a professional, not-for-profit association of executives responsible for communication between public corporations, investors and the financial
community. CIRI contributes to the transparency and integrity of the Canadian capital market by advancing the practice of investor relations, the professional competency of its members and the stature of the profession. With more than 600 members and four chapters across the country, CIRI is the voice of IR in Canada. For further information, please visit

SOURCE Canadian Investor Relations Institute

For further information:

Tom Enright
President and Chief Executive Officer, CIRI
(416) 364-8200

Profil de l'entreprise

Canadian Investor Relations Institute

Renseignements sur cet organisme


Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .


Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.


Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.