CHAPTER 04 True Majority Voting for CBCA Public Companies: Is Your Board Ready?
Our Take: Five Steps to Ensure a Smooth Transition
1 Review general bylaws and articles, and update where appropriate. CBCA issuers should consider updating their bylaws to reflect the new voting regime, including to formalize the concept of the temporary holdover director. Issuers should also be mindful of their required number of directors and board quorum thresholds.
2
Review material contracts for provisions triggered by board changes. Although the grace period for unelected incumbent directors to continue in office is a needed allowance, issuers should proactively review the terms of their material arrangements to identify which terms (such as termination, defaults or payment acceleration), if any, may be triggered by potential board changes under the new CBCA regime. Where possible, issuers may look to amend those terms to include exceptions for changes arising from a majority vote in an uncontested election, and should certainly be thinking about such terms in future arrangements.
52
Davies | dwpv.com
Powered by FlippingBook