Proposed Canada Business Corporations Act Amendments: A New Era of True Majority Voting and Diversity?

On September 28, 2016, the federal government introduced Bill C-25 in Parliament, proposing significant amendments to the Canada Business Corporations Act (CBCA) (the Proposed Amendments). If adopted, the Proposed Amendments will impose obligations on reporting issuers (and other distributing and prescribed corporations, defined in the CBCA) in line with current governance best practices, including the following: true majority voting: requiring shareholders to cast their votes “for” or “against” each individual director’s election (rather than slate voting), and prohibiting a director who has not been elected by a majority of the votes cast from serving as a director, except in “prescribed circumstances”; annual director elections: requiring corporations to hold annual elections for all directors of a company’s board, effectively prohibiting staggered boards; and diversity disclosures: requiring corporations to place before shareholders, at each AGM, information respecting diversity among the directors and among the members of senior management.