TORONTO, March 11, 2014 (GLOBE NEWSWIRE) -- The Institute of Corporate Directors (ICD) today submitted its comments to Industry Canada in response to the Consultation on the Canada Business Corporations Act (CBCA).
"We strongly agree with the federal government that Canada must maintain a strong corporate governance framework that aligns with best practices," said Stan Magidson, President and CEO of the ICD. "However, any changes to the CBCA should be made with the greatest of caution and should not interfere with or duplicate the mandates and rules of provincial regulators, stock exchanges, and other legislative bodies."
In its comment letter, the ICD states that:
- Corporate governance in Canada is best advanced through identification of best practices and their development in the market as opposed to the imposition of prescriptive rules and regulations.
- Legislative amendment to the CBCA should only be made if it will clearly add long term value to corporate governance and the competitiveness of Canadian businesses. Amendments should not add to their regulatory burden with duplicative requirements.
- A number of the proposals in the Consultation Paper such as director elections and majority voting, and board diversity have already been effectively addressed through rules or proposals from the CSA, TSX and OSC, which are much more responsive to market conditions than are legislative amendments.
The ICD also cautioned against a "one size fits all" approach, saying that prescriptive rules and regulations can be rigid resulting in unintended consequences, and may be contrary to the fundamental concept of director accountability.
The consultation was launched by Industry Canada on December 11, 2013 to ensure that the governance framework for CBCA corporations remains effective, fosters competitiveness, supports investment and entrepreneurial activity, and instills investor and business confidence.
"We commend Industry Canada for the high quality of their consultation paper and appreciate the opportunity to provide input on these important issues," added Mr. Magidson.
The full ICD comment letter can be viewed at: www.icd.ca/policy along with ICD's previous positions on say on pay, board diversity, and majority voting.
About The Institute of Corporate Directors (ICD)
The Institute of Corporate Directors (ICD) is a not-for-profit, member-based association representing Canadian directors and boards across the for-profit, not-for-profit, and Crown sectors. The ICD has more than 8,000 members and 11 local chapters across Canada. The ICD fosters the sharing of knowledge and wisdom through education, professional development programs and services, and thought leadership and advocacy to achieve the highest standard of directorship. For more information, please visit: www.icd.ca.