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Big Canadian investors push for more say in director nominations

Mark Wiseman, CPPIB's chief executive, says his organization supports the push as a large Canadian and global investor.

An organization backed by the country\’s biggest pension funds and cash managers is looking on Canada to adopt U.S.-style rules to make it easier for large shareholders to appoint directors for election to company boards.

The Canadian Coalition permanently Governance, whose members include the Canada Type of pension Investment Board and CIBC Asset Management Inc., is urging Industry Canada to amend the Canada Business Corporations Act to give shareholders owning as little as three per cent of a company\’s shares the right to name up to three nominees who\’d be contained in documents circulated to any or all shareholders who would vote on the nominees at the company\’s annual general meeting.

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\”We\’re trying to build inside a system that isn\’t going to be expensive or onerous,\” says Stephen Erlichman, executive director of the CCGG. \”This is not radical – this is going on all over the world.\”

The coalition suggests the measure – referred to as proxy access – could be immediately put in place voluntarily, as companies based in the United States for example General Electric Co. have done.

But Richard Leblanc, an affiliate professor at York University, says voluntary adoption is \”never competitive with regulation\” to enhance shareholder democracy.

\”In one fell swoop, Industry Canada could mandate proxy access,\” Leblanc said, adding that while shareholders can already submit their own director nominees, \”that costs a lot and – is prohibitive.\”

Mark Wiseman, CPPIB’s chief executive, says his organization supports the push like a large Canadian and global investor.

\”We are hopeful that Canadian regulators, Canadian legislators, and even Canadian corporations take the views of owners seriously,\” said Wiseman, who\’s also on the board of the governance coalition.

\”At no more the day, shareholders own the businesses in which they invest, and shareholders ought to have significant rights in determining how those corporations are governed,\” he said.

The movement to give significant shareholders of public companies a simple and inexpensive way to get their views expressed on the board of directors is gaining popularity in the United States.

In February, the board of Whirlpool amended the business\’s bylaws to allow large, longstanding shareholders to appoint candidates for up to 20 percent of the company\’s board positions.

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