Notes
Chapter 1 – Special Committees: Governance Safeguards for Conflict of Interest Transactions and High-Stakes Situations 1 Peoples Department Stores (Trustee of) v Wise , 2004 SCC 68 (SCC) [ People’s ]; BCE Inc. v 1976 Debentureholders , 2008 SCC 69 (SCC) [ BCE ]. 2 Davies Governance Insights 2019 , online: https://www.dwpv. com/en/Insights/Publications/2019/Davies-Governance- Insights-2019, chapter 1. 3 See Multilateral CSA Staff Notice 61-302 – Staff Review and Commentary on Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (July 27, 2017); The Catalyst Capital Group Inc. (Re) , 2020 ONSEC 6 (OSC) [ Catalyst ]. 4 Davies (December 20, 2019), online: https://www.dwpv.com/ en/Insights/Publications/2019/Expectations-of-Special- Committees. 5 Davies (February 27, 2020), online: https://www.dwpv.com/ en/Insights/Publications/2020/HBC-Privatization-Part-II. 6 Magna International Inc., Re , 2010 ONSEC 13 (OSC) [ Magna ]. 7 Our dataset of fees paid to special committee members by Canadian public companies does not represent an exhaustive or complete list of all transactions in which special committees have been used or paid a fee. Rather, the data rely exclusively on the publicly available information disclosed by Canadian public companies during the noted period in their management proxy circulars and other continuous disclosure documents. Chapter 2 – Risky Business: The Board ’ s Role in Enterprise Risk Management 8 Paul J. Sobel and Kurt F. Reding, “Aligning Corporate Governance with Enterprise Risk Management: Melding Enterprise Risk Management with Governance Means Directors, Senior Management, Internal and External Auditors, and Risk Owners Must Work Interdependently” (2004) 5(2) Management Accounting Quarterly , 29. Gale Academic OneFile, online: https://go.gale.com/ps/ anonymous?id=GALE%7CA118890702&sid=googleScholar &v=2.1&it=r&linkaccess=abs&issn=15285359&p=AONE &sw=w, citing Thomas L. Barton, William G. Shenkir and Paul L. Walker, Enterprise Risk Management: Pulling it All Together (Altamonte Springs: Institution of Internal Auditors Research Foundation, 2002), at xi.
9 Davies (June 5, 2020), online: https://www.dwpv.com/en/ Insights/Publications/2020/Canadian-Directors-Should- Heed-US-Caremark-Litigation. 10 See In the Matter of Cartaway Resources Corporation (Re) , 2000 LNABASC 375, 9 ASCS 3092 (ASC) [ Cartaway ]. In that case, the Alberta Securities Commission (ASC) brought proceedings against the chief executive officer and a director of Cartaway in connection with misleading press releases that inflated the stock price. In considering what, if any, liability should be attributed to the director in such circumstances, the ASC referred to a number of U.S. and Canadian cases regarding liability for a director’s “failure to monitor.” The ASC noted that there appear to be two standards that are applicable to directors to assess liability. The first is the well-known Standard Trustco standard (the “regulatory test”), which involves an objective evaluation of whether a director exercised appropriate prudence and due diligence, having regard to the particular circumstances, the information available and the systems in place to deal with such information. The second is the Caremark standard (the “negligence test”), which imposes a lesser standard on a director in that it does not involve an evaluation of the impugned behaviour through an objective lens; rather it considers factors such as good faith and reliance on a rational process to assess liability. In Cartaway , the ASC applied the regulatory test since the securities disclosure standards imposed on directors were codified in legislation and related instruments and therefore warranted the higher standard. 11 India Today , “94% Companies Think COVID-19 Pandemic Can Boost Their Risk Management Techniques: Global Survey” (May 9, 2020), online: https://www. indiatoday.in/education-today/latest-studies/story/94- companies-think-covid-19-pandemic-can-boost-risk- management-1676236-2020-05-09. 12 Vanguard Group, Investment Stewardship 2020 Semiannual Report (2020), online: https://about.vanguard. com/investment-stewardship/perspectives-and- commentary/2020_investment_stewardship_semiannual_ report.pdf, at 4. 13 Glass Lewis, 2020 Proxy Paper Guidelines: An Overview of the Glass Lewis Approach to Proxy Advice (Canada) (2020), online: https://www.glasslewis.com/wp-content/ uploads/2016/11/Guidelines_Canada.pdf, at 10, 16; ISS, Canada: Proxy Voting Guidelines for TSX-Listed Companies: Benchmark Policy Recommendations (November 18, 2019), online: https://www.issgovernance.com/file/policy/active/ americas/Canada-TSX-Voting-Guidelines.pdf, at 16.
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