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Federal Bill Would Change How Corporate Directors Are Elected

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Jun 21, 2017

On June 21, 2017, the federal government tabled a bill in the Senate that would make a number of important changes to the Canada Business Corporations Act (CBCA), the Canada Cooperatives Act, the Competition Act, and the Canada Not-for-profit Corporations Act.

As Corporations Canada points out, Bill C-25 makes three important changes to how corporations are governed and regulated: it gives shareholders the ability to vote against directors, changes how documents for shareholder meetings are to be sent to and accessed by shareholders, and requires certain corporations to report the diversity of their directors and senior management.

The biggest change that Bill C-25 would bring about is the first one, giving shareholders the ability to vote against directors. "Currently, shareholders can either vote for a director or withhold their vote," states an article by PLLR Lawyers. "In situations where only one person is vying to fill a vacancy on the board of directors, just a handful of 'for' votes can get that person elected." If C-25 passes, a majority of "against" votes would result in that individual not getting elected.

Review Bill C-25 on the Parliament of Canada's website and an article on Pryke Lambert Leathley Russell LLP's website.

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