Junior issuers and issuers in nascent industries should be proactive and prioritize establishing robust corporate governance practices from inception, rather than in response to issues as they emerge.
2. MAINTAIN BOARD OVERSIGHT OF CRITICAL OPERATIONS, CONTROLS AND RISKS – Establish and implement robust internal controls and written policies and procedures for timely reporting to the board, particularly with respect to key operations, risks and compliance matters. – Seek external advice in cases where expertise or in-house resources are not available to develop appropriate policies and procedures.
3. PROVIDE TRANSPARENT AND TIMELY DISCLOSURE TO KEY STAKEHOLDERS – Ensure that disclosure to investors and other key stakeholders is clear and easy to understand, balanced and provided on a timely basis. – Make disclosure entity-specific and related to the transaction or development in question; avoid boilerplate language. – Prominently disclose any relationships or circumstances that may, or may appear to, give rise to conflicts of interest (including due to cross-ownership or other financial interests). – Boards (or special committees, discussed further in Chapter 1, Special Committees: Governance Safeguards for Conflict of Interest Transactions and High-Stakes Situations) charged with evaluating a transaction should establish robust processes to fulfill their mandates and anticipate the need to provide detailed disclosure of the background and role of the board/committee throughout the process, including how any conflicts were managed.
– Be cognizant of industry or product factors that may present unique risks.
– Do not be complacent – continually probe management and re-evaluate governance practices. – Document discussions on material operations, risks and developments, including relevant corporate governance considerations, and keep the documentation up to date.
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Governance Insights 2020
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