New TSX Rule: Listed Issuers Must Adopt Majority Voting Policies In Uncontested Director Elections

TSX is implementing a new rule requiring listed issuers to adopt majority voting policies in uncontested director elections. This goes a step further than TSX's 2012 rule changes that eliminated slate voting and staggered boards and required listed issuers merely to disclose whether or not they had voluntarily adopted a majority voting policy. The Canadian Coalition for Good Governance, which has published a model majority voting policy and has been pressing securities regulators and TSX to make such policies mandatory, has indicated that 85% of issuers in the TSX/S&P Composite Index already have majority voting policies in place. Therefore, TSX's new rule will mainly affect smaller issuers and represents one way in which the Canadian corporate governance regime is now stricter than the U.S. regime. Although voluntary adoption is common among large U.S. companies, majority voting policies are not mandatory under SEC or U.S. stock exchange rules. This may change,