Further Thoughts On TSX Changes To Director Elections And Majority Voting

The Toronto Stock Exchange recently announced proposed amendments to the TSX Company Manual that would require all TSX-listed issuers to elect directors by majority vote (the "Proposed Amendments"). If the Proposed Amendments are adopted, security holders will effectively be required to vote "for" or "against" each individual board nominee, in contrast to the default plurality voting under Canadian corporate law whereby security holders voting by proxy either vote "for" or "withhold" when electing directors.

Under the Proposed Amendments, the TSX would require that all listed issuers adopt majority voting for uncontested director elections.¹ This could be implemented by the board's adoption of a majority voting policy, as opposed to formally amending an issuer's constating documents. Where a majority voting policy is adopted, security holders voting by proxy would still vote "for" or "withhold" for each individual board nominee, as required by corporate law.