Corporate governance rules up for review as Ottawa launches consultation Ottawa is launching a public consultation over possible new corporate governance rules for publicly traded companies - including whether companies should have to hold say-on-pay votes on their executive compensation practices. Federal Industry Minister James Moore announced the review this week, saying his department is considering whether to make amendments to the Canada Business Corporations Act that would affect governance of companies incorporated under the federal legislation, which includes about half of Canada's largest publicly traded companies. A consultation paper accompanying the announcement lists a long array of topics under consideration - ranging from gender diversity on boards to tax evasion and takeover bid standards - but in most cases does not suggest what if any reforms may be introduced. For example, the paper asks for comments on whether new measures are needed to promote diversity and get more women on corporate boards, but does not propose a favoured reform option. It notes that various countries have introduced quotas, targets or voluntary guidelines for women on boards. The government said it is reviewing whether companies should have to offer annual advisory votes on executive compensation - known as say on pay votes - which are now mandatory for public companies in the United States. It also said it is reviewing whether there should be majority voting rules for directors, which require directors to get a majority of "yes" votes to be elected to a board. Currently, shareholders can only vote "yes" or have their votes withheld and not counted, which means directors can be elected with even a single vote. The consultation also asks for input on giving shareholders greater access to a proxy circular to propose directors for election, as well as possible new rules giving shareholders the right to vote on acquisitions that would significantly dilute the number of shares outstanding. The government is also reviewing current rules requiring at least 25 per cent of directors on boards to be Canadians. The CBCA has been in force since 1975 and received comprehensive amendments in 2001, but corporate governance has evolved significantly since then, and the paper said Canada need legislation "that both reflects and facilitates the best practices of Canadian corporations." Industry Minister James Moore said it is time to have "meaningful conversations" on governance issues. "That means having greater access to information on corporations in a timely and transparent manner, and being in a strong position to support law enforcement and other government agencies in the fight against money laundering, terrorist financing and tax evasion by improving the ability to trade and detect criminal funds in the Canadian financial sector," Mr. Moore said in a statement. The government is also seeking input on ways to improve transparency and reporting to combat bribery in international transactions, and is suggesting there could be improved disclosure rules for share ownership to reduce money laundering, terrorist financing and tax evasion. The Canadian Coalition for Good Governance, which represents most of Canada's largest institutional investors, has been urging the government to reform the CBCA, said executive director Stephen Erlichman. He said a key change the CCGG wants to see is the introduction of a mandatory majority voting rule, because many companies have refused to adopt the practice voluntarily. Canada and the United States are the only two major countries in the world that do not have a majority voting standard for directors. The coalition is also keen to win more access by shareholder to nominate directors to boards, improve the quality of proxy voting to reduce over-voting errors and to see more diversity on boards, Mr. Erlichman said. He said it is not often the federal government proposes amending the CBCA, so investor advocates should seize the moment and not waste an opportunity to promote reforms. "Our best bet right now to try to improve the corporate governance of Canadian public companies is to get this legislation changed, and if it doesn't happen now under this set of changes for the CBCA, it won't happen for a long time," Mr. Erlichman said. So anybody in Canada that's concerned about this needs to provide comments during this 90-day consultation period. Written submissions will be accepted for 90 days until March 11.