Publications 

6 November 2014

The value of “just say no”: A Response to ISS

On October 22nd 2014, ISS published a note on the financial consequences for shareholders to vote “NO” to a proposed takeover. The ISS note, and its conclusion, comes at a propitious time for the Valeant cum Pershing Square attempt to take over Allergan. The shareholders of Allergan, who may get to vote on this takeover […]

16 October 2014

Hedge fund goes public…with a dual class of shares!

When, for reasons that will be left unexplained here, hedge funds decide “to go public”, i.e. list shares on a stock exchange, they marshal all the available legal, fiscal and accounting acumen to achieve two goals: 1. Pay as little tax as possible; 2. Keep total, unfettered control of the company. To achieve the latter, […]

9 October 2014

“Looking for good governance – can co-ops get it right?”

“Stay different, and don’t ape the corporate governance structures of the private sector. That in outline was the message to co-ops from Professor Yvan Allaire, the executive chair of Canada’s Institute for Governance to delegates at the co-op summit taking place in Quebec this week. Yvan Allaire talked of what he called a “deep governance […]

2 September 2014

Why Tim Hortons is not buying Burger King?

Although smaller than Burger King, Tim Hortons (TI) is more profitable and better managed than Burger King. Their stock market valuation is comparable. Why then is it not Tim Hortons that is trying to buy Burger King? TI becomes a target of hedge funds One must recall that in early 2013, two activist funds (Scout […]

18 August 2014

To govern in the interest of the corporation

The measure of a business corporation’s success is undoubtedly its economic performance. However, to achieve an excellent performance in the long run, the corporation must make the best use of the talent and experience of all its personnel. It must protect its good reputation as an employer, supplier of goods and services, buyer and citizen […]

18 August 2014

Hedge Fund Activism and their Long-Term Consequences

In our paper “Activist” hedge funds: creators of lasting wealth? What do the empirical studies really say?” (available here), we asked Lucian Bebchuk, Alon Brav and Wei Jiang questions of the sort that any referee/reviewer for a professional journal would raise about their paper The Long-Term Effects of Hedge Fund Activism. Their paper’s aim is […]

22 July 2014

Do Activist Hedge Funds Really Create Long Term Value?

“About a year ago, Professor Lucian Bebchuk took to the pages of the Wall Street Journal to declare that he had conducted a study that he claimed proved that activist hedge funds are good for companies and the economy. Not being statisticians or econometricians, we did not respond by trying to conduct a study proving […]

17 July 2014

“Activist” hedge funds: creators of lasting wealth? What do the empirical studies really say?

Hedge funds have found, in some academic circles, supporters and champions of their enduring contribution to shareholder wealth. Some recent empirical research has triggered an important debate in the American corporate/financial world about the role of board of directors, the rights of shareholders, and the very concept of the business corporation. The terms of the […]

16 July 2014

Guidance for Proxy Advisory Firms

IGOPP has issued in 2013 a policy position on the role of proxy advisors titled The Troubling Case of Proxy Advisors: Some policy recommendations. This submission draws largely from that policy paper and, hence, it is attached as an appendix. The proposals of the CSA to raise somewhat the level of disclosure requested from proxy […]

9 July 2014

The bizarre case of a “national securities regulator”

So a couple of additional provinces might sign up for Ottawa’s deal to create some sort of centralized securities regulator. Ottawa just won’t let go of this foolish idea. Having been rebuked by the Supreme Court, having been shown that all the claims made to justify a “national”security commissions were bogus, the federal government is […]

12 June 2014

Just say no to the myth of shareholder democracy

It is tiresome indeed to debate with people who never respond to your fundamental arguments. Instead, they wrap themselves in the spurious argument of “shareholder democracy”. If corporations were to apply the principles of citizen democracy, tourists-shareholders would not have the right to vote and newcomers to shareholding would have to wait a good period […]

9 June 2014

Les inégalités économiques et la rémunération des dirigeants d’entreprises

Dans une prise de position en 2012, l’IGOPP affirmait que les fortes rémunérations versées aux dirigeants d’entreprises pourraient éventuellement créer des problèmes de légitimité pour le entreprises. Si les conseils d’administration ont à cœur de s’acquitter complètement de leur obligation fiduciaire d’agir dans l’intérêt à long terme de l’entreprise, ils doivent se préoccuper de l’impact des […]

26 May 2014

Board Members’ Compensation and Governance: Issues and Challenges

The requirements in credibility, availability and legitimacy of board members have increased substantially since 2000. In that context, directors’ compensation and its impact on their conduct and decisions become salient issues. Yet, directors’ compensation remains a little examined topic of governance. This is why the Institute for Governance (IGOPP) has produced a report prepared by […]

26 May 2014

Thomas Piketty is no Marxist, he’s a Jacobin!

Piketty totally misses the real driver of this huge increase in compensation of U.S. executives: stock options. Thomas Piketty is a French economist and the omnipresent author of Capital in the 21st Century. Since the publication of the English version of his book, Piketty has become the coqueluche of the American left. Although branded as […]

15 May 2014

The Canada Business Corporations Act

The Institute for Governance (IGOPP) submitted his comments to Industry Canada in response to the Consultation on the Canada Business Corporations Act (CBCA).. We will examine these issues individually to formulate specific recommendations in each case. In its comment document, the IGOPP covered the following topics: Shareholder advisory votes on compensation packages Diversity of board […]

14 May 2014

Should shareholders rule? Yes, it’s the law

“Yvan Allaire’s recommendation would have securities regulators abdicate their statutory responsibilities. Despite having declared elsewhere that governance by directors of public corporations is “a fiduciary façade for shareholders … largely a mirage” (The limits of “good” governance: Confession of the former chairman of SNC-Lavalin, 2013), Mr. Allaire repeats his earlier argument, suggesting that securities regulators […]