Last month, the Government of Canada tabled Bill C-25 to amend the Canada Business Corporations Act (the “CBCA”). The objective of these amendments is to modernize Canada’s legal and regulatory framework for the country’s nearly 270,000 federally incorporated corporations, and would also amend the Canada Cooperatives Act and the Canada Not-for-profit Corporations Act.
The following are some key changes which were proposed, and, if the bill is passed, should be considered should they impact your organization:
- Annual Elections and Individual Votes: There will be a requirement to hold annual elections and individual votes for director candidates, as opposed to slate voting. This is consistent with the requirements already imposed on TSX-listed companies, and many companies have already adopted this requirement voluntarily.
- Majority Vote: Directors must receive a majority of votes in favour of their election when the number of candidates is the same as the number of positions to be filled.
- “Notice and Access”: The CBCA’s requirements for paper-based communications will be replaced with a “notice and access” system which would allow for corporations to use electronic communications to provide notice of shareholder meetings, and online access to relevant documents.
- Diversity: Reporting issuers will be required to provide to its shareholders information concerning the gender composition of their boards and senior management, as well as disclose any diversity policies or explain why none are in place.
While these amendments are still in the early stages and will likely undergo further revisions, they are worth noting as they may have significant impacts on your organization if they come into effect.
