moved:
Motion No. 6
That Bill C-8 be amended by adding after line 33 on page 34 the following new clause:
“70.1 Section 160 of the Act is amended by striking out the word “and” at the end of paragraph (h) and by adding the following after paragraph (i): j ) a person who is a director of another financial institution; and k ) a person who has, directly or indirectly, an interest in the supply of products or services to the institution.
Motion No. 7
That Bill C-8 be amended by adding after line 20 on page 35 the following new clause:
“71.1 The Act is amended by adding the following after section 161:
161.1 (1) The position of chairman shall be separate from the position of chief executive officer and shall not be held by the same person.
(2) For greater certainty, the role of the chairman shall be to ensure that the board of directors assesses the management of the institution, while the role of the chief executive officer shall be to manage the institution's day- to-day activities.”
Madam Speaker, basically, these amendments have three purposes. The first is to give more power to shareholders of financial institutions. Earlier, we spoke about the special ownership structure of the Canadian financial sector and that is precisely the idea of the first motion. We said, for example, that for large banks 20% of the shares can be held by a single shareholder and that 80 % of voting shares would be widely distributed in the public.
The effects of such a distribution can be negative since small shareholders have very little to say, particularly during annual meetings of the large Canadian banks, and the bill is designed to strengthen the powers of those small shareholders.
We add our voice to that of the Association de protection des épargnants et des investisseurs du Québec, the APEIQ. We want to give our support to its campaign for more democracy at annual meetings of banks, as well as in the way the boards of directors of financial institutions operate.
On this point, in our first group of amendments, we say that shareholders, no matter how small, have a right to be heard and to participate in any decision made by the financial institutions. To do so, they must receive prompt and timely notice of a general meeting. They must have all the documents relevant to this meeting and they must also be allowed to be heard, not just on matters having to do with the profitability of the financial institution, but also on any other matter which directly or indirectly affects the activities of the institution per se.
I will give an example. Right now, it is not possible for shareholders at a general meeting to raise matters having to do with the social aspects of a company's activities. Nor may they raise political issues. For instance, they could not ask questions about the activities of a company in which they were a small shareholder in countries where democracy was not the rule and where fundamental rights were not respected. It is not possible at a general meeting to table resolutions along these lines or even to question the board of directors. It is time that this changed. It is now 2001 and the democratic system in use at the general meetings of major financial institutions is completely archaic.
There are also other motions, one of which was to avoid any possibility of conflict of interest.
A person cannot sit on the board of a major bank and also provide that bank with goods and services. This would make him or her both judge and party to the action when it came time to make decisions relating to the financial institution.
For example, someone cannot be a member of the board of a bank and a shareholder in a company of external auditors, for instance, hired by the bank to audit its financial statements.
What we are proposing then is to ensure that there are new provisions which would, for example, call for questions to be asked and for it not to be acceptable for a board member to be directly or indirectly involved in providing the institution with products and services. Nor would it be allowed for a board member of one financial institution to also sit on the board of another. This could lead to problems.
That is the gist of what we are proposing. It is also the position of the Association de protection des épargnants et des investisseurs du Québec, APEIQ, which we totally endorse.
It is our hope that, in the spirit of greater democratization and transparency of the activities of the financial institutions, the government will support such proposals, along with the members of the other opposition parties. They cannot help but improve things from the point of view of equity, small shareholder participation, democratization and, above all, transparency of the activities of these major financial institutions.