Toronto Stock Exchange Makes Majority Voting Mandatory

The Toronto Stock Exchange (TSX) announced on February 13, 2014, amendments (Amendments) to the TSX Company Manual (Manual) mandating majority voting. From June 30, 2014 (Effective Date), the Amendments will require each director of a TSX-listed issuer, other than directors of a majority-controlled listed issuer, to be elected by a majority of the votes cast at any shareholders' meeting other than a contested meeting.

Background

Under Canadian corporate laws, election of directors by shareholders of a corporation is based on a "plurality" system under which a shareholder can either vote for a director nominee or withhold his or her vote. Shareholders do not have the option to "vote against" a director. If the number of nominees presented for election as directors is the same as the number of directors fixed by the management of a public issuer, management's slate will be elected even if only one vote "for" is cast for each director and all other votes are