The Ontario Securities Commission is examining a number of issues related to shareholder democracy, but it isn’t proposing any new rules in the area just yet.

In a staff notice published Monday, the OSC indicates that it has its eye on several issues related to shareholder democracy, including mandatory say-on-pay votes, the use of slate voting for director elections; and the proxy voting system.

The OSC pledged to examine these issues in its recent statement of priorities and also told a legislative review committee that it would do so.

The commission is not proposing any new rules in these areas just yet, but is seeking comment on whether it should do so.

Say on pay
On the subject of mandatory shareholder advisory votes on executive compensation, the OSC notes, “While a number of large public companies are voluntarily giving their shareholders a say-on-pay, there is no current initiative to implement a mandatory say-on-pay regime for all reporting issuers.”

The OSC adds that regulators have focused on improving executive compensation disclosure, and have been monitoring international developments on say-on-pay votes and are still considering whether to introduce mandatory say-on-pay votes here, too.

Say on pay initiatives have been adopted in the United Kingdom, Europe, Australia, and are expected to be introduced in the United States

Slate voting
The OSC says that it is “assessing whether reforms to securities law are appropriate” to facilitate individual director voting and majority voting for director elections.

Proxy voting system
The commission says that it recognizes the need for an effective proxy voting system, and in addition to an ongoing national rulemaking initiative on the subject, the OSC says its staff are generally reviewing the proxy voting system “to determine whether there is a need for additional reforms and to what extent securities law should address these matters.”

Comments sought on proposals
The OSC says it intends to co-ordinate its review, and the development of any regulatory proposals, with other provincial regulators. In the meantime, it is seeking comments on whether it should develop proposals in these areas and, if so, the appropriate scope of such proposals. Comments are due by March 31.

IE