CHAPTER 02 Bulletproofing Your Board Against Oppression Claims
objectively aroused” ( Rooney v ArcelorMittal , at para 71, as quoted in Ford Motor Co of Canada v OMERS ). Consequently, boards should expect that a complainant will closely review all recent public disclosure of a company to identify contradictory statements. All public disclosure – including annual reports, annual information forms, press releases, investor presentations, answers given at investor meetings, interviews or other interactions with journalists – can inform the reasonable expectations of a corporation’s shareholders, bondholders and other potential complainants. In addition, a company and its board should ensure that its public disclosure and safe harbour language, as well as any descriptions of plans and projections for the future, are current and provide appropriate flexibility to pursue new courses of action or opportunities that may be contemplated. 3 Prepare and maintain minutes of board meetings in real time. Minutes of board and committee meetings (including meetings of any special committee or ad hoc committee) often form part of the evidentiary record in oppression proceedings. The company and the board may seek to rely on the minutes to help establish that their decisions followed a proper process and took into account all matters appropriate for consideration. There should be only one set of approved minutes, which should be maintained by the corporate secretary and kept secure with the company’s corporate minute books. Minutes should be prepared and maintained in real time, particularly in the context of a material transaction or decision. Real-time preparation and maintenance of minutes are not only best practices, but may also be necessary to comply with real-time regulatory reviews by Canadian securities regulators in connection with conflict of interest transactions. In addition, in the case of potentially contentious or contested situations, or where the risk of litigation or regulatory scrutiny is heightened, it may be prudent to seek advice from external legal counsel before preparing or finalizing minutes. There is no one-size-fits-all rule regarding the appropriate level of detail to include in minutes. The level of detail will depend on, among other factors, the nature of the issues under consideration, their foreseeable contentiousness or scope for scrutiny, the corporation’s past practices with respect to minute- taking, the length of the meetings and the number of issues discussed. However, the following practices may be advisable:
Real-time preparation and maintenance of minutes are not only best practices but may also be necessary to comply with real-time regulatory review by Canadian securities regulators in conflict of interest transactions.
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