CANADA Trends and Developments Contributed by: Bill Gilliland, Dentons
• CBCA-incorporated public corporations must allow shareholders to vote “for” or “against” individual director nominees in an uncontest - ed election, rather than “for” or “withhold” . • Where only one nominee is up for election for each board seat and less than 50% of the votes cast by shareholders are “for” particular director nominee, such a nominee will not be elected as a director (subject to provi - sions in the issuer’s articles). However, if an incumbent director is not elected by a major - ity of “for” votes at the meeting, they will still be permitted to remain as a director until the earlier of: (i) the 90th day after the day of the election; or (ii) the day on which their succes - sor is appointed or elected. • The elected directors may reappoint the incumbent director even if they do not receive majority support in the most recent election in certain limited circumstances: (a) where it is required to satisfy the CBCA’s Canadian residency requirement; or (b) where it is required to satisfy the CBCA’s requirement that at least two directors of a distributing corporation are not also officers or employees of the corporation or its affiliates. Preparing for Mandatory Climate-Related Disclosure – Governance Changes for Public Corporations On 18 October 2021, the CSA published a pro - posed National Instrument 51-107 – Disclosure of Climate-related Matters and its proposed Companion Policy 51-107CP (together, the Cli - mate Disclosure Proposals) for comment. The Climate Disclosure Proposals would require disclosure based on recommendations of the Task Force on Climate-Related Financial Disclo - sures (TCFD). The Climate Disclosure Proposals
would require issuers to make disclosure in the following areas. • Governance – describing the board’s over - sight of climate-related risks and opportuni - ties, and management’s role in assessing and managing climate-related risks and opportu - nities. • Strategy – describing any climate-related risks and opportunities identified over the short, medium and long term and describing the impact of these risks and opportunities on its business, strategy and financial planning. • Risk management – describing its processes for identifying, assessing and managing cli - mate-related risks and how these processes are integrated into overall risk management. • Metrics and targets – describing its metrics used to assess climate-related risks and opportunities and targets used to manage these risks and opportunities. The TCFD contemplates that issuers should disclose greenhouse gas emissions (Scope 1, 2 and 3). The Climate Disclosure Proposals would require issuers to make this disclosure or explain why they do not. The Climate Disclosure Proposals would not require issuers to disclose the resilience of their strategy with reference to various climate scenarios, a key element of the TCFD recommendations. In preparing to comply with the new require - ments, corporations and boards should be tak - ing the following steps. • Boards of directors should expressly estab - lish oversight of climate-related risks and opportunities of the issuer. This will require reviewing, and where necessary amending, board charters and mandates and board skills and competencies matrices, and then review -
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