OSC Provides Update on Review of Shareholder Democracy Issues

On January 10, 2011, the Ontario Securities Commission ("OSC") released a staff notice which provides an update on the OSC's review of shareholder democracy issues. The OSC has targeted three issues for further review and the potential development of regulatory proposals. The issues are related to director elections, shareholder voting on executive pay (i.e., "say-on-pay"), and the effectiveness of the proxy voting system.

Director Election Issues

The OSC is reviewing two issues with respect to director elections: slate voting vs. individual director voting and plurality voting vs. majority voting.

Slate voting refers to the practice whereby management proposes a slate or group of directors to shareholders and shareholders are given the option of either voting for the entire group or slate of nominees or withholding their vote from the entire slate. Individual director voting would allow a shareholder to cast its vote in favour of, or withhold its vote in