In a letter to the federal Minister of Industry, David Emerson, the Investment Dealers Association of Canada states its opposition to including corporate governance requirements in federal legislation.
The letter from IDA chief executive, Joe Oliver, says the association doesn’t support adding corporate governance requirements that differ from provincial requirements to the Canada Business Corporations Act, nor does it want to see duplicative federal requirements that add compliance costs to achieve the same end.
“To do so would create two set of rules for federally-incorporated companies, add unnecessary regulatory cost, and move our securities markets even further away from the goal of national harmonization and uniformity of regulation that we all desire and have been pursuing for some time,” he says.
The IDA letter stresses that existing provincial requirements are flexible and suit the Canadian market, with its heavy concentration of small cap companies, compared with the more onerous requirements imposed in the much bigger U.S. market.
Back in May 13, then-Industry minister Lucienne Robillard, issued a paper proposing 10 amendments to the CBCA to strengthen corporate governance standards and increase investor confidence in Canada.
These include requiring:
- a majority of corporate directors be independent;
- firms to either separate the functions of board chair and CEO, or install an independent “lead director”;
- audit committees to be composed only of independent directors; audit committees to recommend the auditor to the board of directors prior to the board’s approval of the management proxy circular;
- firms to have independent nominating and compensation committees; and
- the certification of financial statements.
The Industry paper also proposed:
“Canadian investors, especially individuals with small holdings, have a right to expect that the corporate governance standards of Canadian companies are among the highest in the world. We intend to be their champion,” said Robillard at the time.