Evidence of meeting #45 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was board.
A recording is available from Parliament.
10:10 a.m.
Head of Corporate Governance, Public Equities, Ontario Teachers' Pension Plan Board
Why was that? Was it because they wouldn't leave?
10:10 a.m.
Head of Corporate Governance, Public Equities, Ontario Teachers' Pension Plan Board
Okay. Well, I think majority voting would help in that regard.
10:10 a.m.
Liberal
10:10 a.m.
NDP
Brian Masse NDP Windsor West, ON
Yes. Thank you, Mr. Chair.
Mr. Lalonde, what is the United States doing right now with regard to its transparency and public identification? Where is it at, and where is it moving toward?
10:10 a.m.
President and Chair of the Board of Directors, Transparency International Canada
The U.S., I am sad to report, is not doing much better than Canada in that regard. If you look at the various task forces that have looked at the implementation of the G20 benefit ownership transparency commitments, the U.S. is faring not much better than Canada. It has, as well, anonymous corporations and the same kinds of challenges in figuring out who owns what.
10:10 a.m.
NDP
Brian Masse NDP Windsor West, ON
Just to be clear, in terms of the disclosure that would be made, it's if you own 25% of the company and it has no other disclosure of how much money and net value that's worth, and so forth. What is the full disclosure you end up making with that?
10:10 a.m.
President and Chair of the Board of Directors, Transparency International Canada
The test they have adopted in the U.K. is if you have a significant controlling interest. They have set those tests for meeting that threshold, but in terms of raw ownership of voting shares, it's 25%. That's what's disclosed. No individuals are required to publicize an inventory of the shares they own. It's the other way around: companies are required to disclose in their reporting who the beneficial owners are who have a significant controlling interest in the company, and that's it.
In terms of the privacy issue, again, we did address it in our report, and I recommend Mr. Baylis read page 36 of our report if he's interested in TI Canada's more detailed views on the privacy issue.
10:15 a.m.
Liberal
The Chair Liberal Dan Ruimy
Thank you very much.
We have a little bit of time left, so we're going to go for another round of five minutes each for each party.
We'll start with Mr. Baylis. You have five minutes.
10:15 a.m.
Liberal
10:15 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Mr. Lalonde, I would like to talk about bearer shares.
My understanding is that you are satisfied with the regulations that have been proposed to eliminate them, but you see an opportunity to do more to remove the ones that are already in circulation.
10:15 a.m.
President and Chair of the Board of Directors, Transparency International Canada
You're talking about the bearer shares, I gather?
10:15 a.m.
President and Chair of the Board of Directors, Transparency International Canada
I apologize, but I'll have to respond in English, because the way the video is working, I'm getting the translated version back and it's making it very difficult to hear and speak.
10:15 a.m.
President and Chair of the Board of Directors, Transparency International Canada
On the bearer shares issue, what we recommend is that.... The act deals now with bearer shares not being issued anymore, but it doesn't deal well, in our view, with what to do with all the bearer shares that are still out there. There has to be a mechanism to flush them out of the system over time.
One of the ways of doing that is that when the company knows the identity of the bearer of the shares, it should crystallize those shares into registered shares in the name of the person it knows is the bearer, so—
10:15 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
In certain instances, in interacting with the shareholder, that information will become public. At that point, you'd like us to say that they're going to retire those shares.
10:15 a.m.
President and Chair of the Board of Directors, Transparency International Canada
You turn those bearer shares into registered shares.
Another trigger can be when the holder of the bearer shares attempts to exercise a right that attaches to those shares, such as a voting right or the collection of a dividend and so on. At that moment, there could be another crystallizing event that turns the bearer share that's already out there into a registered share. Is that—am I clear?
10:15 a.m.
Liberal
10:15 a.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you. This question goes to Mr. Schneider.
At the outset of your presentation, you talked about your focus being on corporate governance and specifically on electing all the board members. I understand this bill proposes going from the current three-year model to a one-year model. The Canadian Bar Association did not recommend the adoption of such a measure, because it risks the loss of business knowledge specifically. As you know, the boards are really responsible for the overall vision and direction of the organization. Usually these are over a five- to 10-year time frame. Can you explain to me how we can mitigate that risk?
10:15 a.m.
Head of Corporate Governance, Public Equities, Ontario Teachers' Pension Plan Board
I looked at the companies we vote for, and they are all annual elections. Every company we voted for in Canada has an annual election. There are no staggered boards that we've voted for.
