February 18, 2014

Corp Fin: Betsy Murphy’s Grand Return!

On Friday, the SEC announced Betsy Murphy is rejoining Corp Fin to serve as the Associate Director who oversees the Offices of Rulemaking, Small Business Policy & Enforcement Liaision. Betsy was the Chief of Corp Fin’s Office of Rulemaking for 10 years before moving over to serve as the Secretary of the SEC, a post she held for 5 years. Betsy is a great catch and I’m sure those in Corp Fin are excited to see her back…

Going to a hoops game at Duke is my fav thing in the world. No better place to see a sporting event – here is a compilation of short vids I took this weekend to give you a flavor…

Shareholder Proposals: ISS Updates Proxy Voting Guidelines

A few weeks ago, ISS updated its proxy voting guidelines to address shareholder proposals that tackle proxy voting topics, including the controversial topics of interim vote tallies, confidential voting policies & treatment of abstentions and broker non-votes…

As I blogged this morning on my “Proxy Season Blog,” John Chevedden lost his appeal last week in the US Court of Appeals for the Fifth Circuit over a “proposal by proxy” case that he lost against Waste Connections last year…

Majority Voting: Toronto Stock Exchange Makes It Mandatory!

Here’s news from Glass Lewis’ blog (and here’s another article):

After nearly a year and a half of radio silence on the topic of majority voting, the Toronto Stock Exchange (“TSX”) announced on February 13th that it would proceed with amendments to the TSX Company Manual mandating that TSX issuers adopt majority voting.

The amendments, which were given the go-ahead by the Ontario Securities Commission, require that issuers, other than majority-controlled companies, be elected by a majority of the votes cast with respect to their election other than at contested meetings. This new mandate will apply to companies with fiscal year ends from June 30, 2014 on, and as such, will likely have little impact on the 2014 proxy season, particularly since roughly 80% of TSX issuers had already adopted a majority voting policy by their 2013 annual meetings.

Nonetheless, the new requirement puts Canada one step ahead of the United States, where plurality voting remains permissible and relatively common. The move represents a significant milestone for the Canadian Coalition of Good Governance (“CCGG”), which has been pushing for mandatory majority voting for over six years and provided some of the language for revised TSX Company Manual. The CCGG has made clear that its majority voting rally isn’t over yet, as it continues to lobby the TSX Venture Exchange for the same corporate governance enhancement.

The new mandate certainly represents a step forward, but still falls somewhat short of the “true majority” voting policy that Glass Lewis prefers, as, pursuant to the new TSX policy, directors that fail to receive majority support from shareholders are not required to step down unless the other board members accept their resignation. However, thanks to the aforementioned language provided by the CCGG, where a director fails to receive majority support “the board shall accept the resignation absent exceptional circumstances,” and, “if the board determines not to accept a resignation, the news release must fully state the reasons for that decision.” These detailed requirements will certainly force the board to take the resignation decision seriously, as boards will be more directly accountable in cases of continued board membership despite majority opposition.

– Broc Romanek