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	<title>IGOPPReports &amp; Studies &#8211; IGOPP</title>
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		<title>Going public: a thing of the past?</title>
		<link>https://igopp.org/en/going-public-a-thing-of-the-past/</link>
		<comments>https://igopp.org/en/going-public-a-thing-of-the-past/#respond</comments>
		<pubDate>Tue, 16 Jul 2024 20:39:50 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[IPO]]></category>
		<category><![CDATA[Private governance]]></category>

		<guid isPermaLink="false">https://igopp.org/entree-en-bourse-un-reve-du-passe/</guid>
		<description><![CDATA[In Canada, 2023 was a lean year for new companies embarking on initial public offerings (IPOs) on the TSX, the country’s main stock exchange. In fact, only one company, Lithium Royalty Corp., proceeded with an IPO, raising about $150 million in March 2023. More than a year later, at the end of June 2024, no [&#8230;]]]></description>
		<content><![CDATA[In Canada, 2023 was a lean year for new companies embarking on initial public offerings (IPOs) on the TSX, the country’s main stock exchange. In fact, only one company, Lithium Royalty Corp., proceeded with an IPO, raising about $150 million in March 2023. More than a year later, at the end of June 2024, no new conventional[1] company has since been listed via IPO on the TSX. This is an abnormally long—even historic—period.

“The public markets are a great economic equalizer, allowing small retail investors, supported by appropriate investor protections, to participate directly in the growth of [the] economy” (Capital Markets Modernization Taskforce, 2021). Studies show that the size of a country’s capital market is positively correlated with its economic development (measured by the long-term real growth rate of GDP per capita), and that, in the case of stock markets, the relationship is estimated at 1:1 (Kaserer and Rapp, 2014). Healthy, attractive markets are essential, as they also promote innovation, economic diversification and greater sharing of created wealth, while making a country’s economy more resilient to shocks (European IPO Task Force, 2020).

For entrepreneurs, an IPO offers many advantages. First and foremost, of course, it is a means of financing growth, but it also enhances brand awareness and reputation (Pešterac, 2020). Compliance requirements imposed by regulators and stock market operators lend companies a high degree of credibility, making it much easier to recruit and retain employees and managers. It is also an undeniable plus when negotiating with local and foreign suppliers.

Of course, an IPO inevitably comes with additional costs associated with public disclosure requirements and other compliance obligations, not to mention the risk of hostile takeover attempts or having to deal with an attack from an activist shareholder. Table 1 lists some of the most frequently raised arguments for and against an IPO.

[1] A conventional company refers to a company with traditional business activities (manufacturing products, providing services, retailing, financial and banking services, etc.), which excludes financial vehicles such as exchange-traded funds, special-purpose acquisition companies, mutual funds, split-share companies, closed-end investment trusts, and so on.
]]></content>
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		<item>
		<title>The performance of Canadian controlled companies listed on the S&#038;P/TSX</title>
		<link>https://igopp.org/en/the-performance-of-canadian-controlled-companies-listed-on-the-sptsx/</link>
		<comments>https://igopp.org/en/the-performance-of-canadian-controlled-companies-listed-on-the-sptsx/#respond</comments>
		<pubDate>Fri, 13 Oct 2023 14:12:45 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Private governance]]></category>

		<guid isPermaLink="false">https://igopp.org/la-performance-des-societes-canadiennes-controlees-inscrites-au-sptsx/</guid>
		<description><![CDATA[Family-run businesses are the cornerstone of market economies. These companies are often imbued with a strong culture rooted in the values of their founder, a culture that develops and strengthens over time, sometimes even beyond the first generations who succeed one another at the helm of the business. They tend to make decisions with a [&#8230;]]]></description>
		<content><![CDATA[Family-run businesses are the cornerstone of market economies. These companies are often imbued with a strong culture rooted in the values of their founder, a culture that develops and strengthens over time, sometimes even beyond the first generations who succeed one another at the helm of the business. They tend to make decisions with a long-term horizon, in consideration of all their stakeholders and the environment, as it is natural for them to want to ensure that future conditions remain favourable. This is the very essence of sustainable value creation.

As they grew, the largest of these companies eventually had to go public. Their founder-entrepreneurs were concerned with maintaining control over the company’s operations in order to further a culture that reflects the values central to the company’s past successes. As such, they sought to preserve the unique character of their business and ensure they could continue to uphold their long-term vision despite the presence of new shareholders, most of them anonymous and changing.

Given their own imperatives at the time of their company’s IPO, some founder-entrepreneurs were unable to raise the necessary funds without diluting their equity stake below the level required to retain control, or did not wish this risk to materialize. They therefore resorted to mechanisms to ensure that control was maintained, notably through the use of different share classes (DCS), each conferring specific rights (multiple voting rights for one of the classes, for example, or exclusive rights to appoint members to the board in order to maintain a majority).

Whether control is exercised through a direct stake or by resorting to a DCS structure, these companies are frequently targeted by categories of investors who consider their governance to be deficient, at least according to the guidelines established for companies with widely held ownership (i.e. without a controlling shareholder). This criticism is often even sharper where DCS companies are concerned, due to the control exercised without an economic stake that is commensurate with exclusive nomination rights or the percentage of votes cast. A number of pressure groups are strongly advocating that all forms of DCS structure be eliminated.

Is this criticism warranted? Does the long-term economic, social and environmental performance of Canadian controlled listed companies support this perception of “bad governance?”

These topics are fiercely debated in various governance forums and have been the focus of considerable research in academic circles. While some voices are raised against founding shareholders and their families maintaining control, others are increasingly being heard in favour of allowing new generations of entrepreneurs to use DCS structures. Several countries have recently revised their rules to allow them on their main stock exchanges, and others, such as France and Germany, are seriously considering doing so in the near future.

The aim of our study is first to situate the debate and summarize the findings of the most recent research. We then compare the performance of Canadian controlled companies in the S&#38;P/TSX Index with that of Canadian companies with widely held ownership in the same group. Comparisons are based both on ESG ratings (Environmental, Social and Governance performance) and total shareholder return over five and 10 years.
]]></content>
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		<slash:comments>0</slash:comments>
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		<item>
		<title>The quest for diversity of boards of directors and in senior management of public corporations</title>
		<link>https://igopp.org/en/the-quest-for-diversity-of-boards-of-directors-and-in-senior-management-of-public-corporations/</link>
		<comments>https://igopp.org/en/the-quest-for-diversity-of-boards-of-directors-and-in-senior-management-of-public-corporations/#respond</comments>
		<pubDate>Fri, 12 Feb 2021 20:28:40 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Diversity]]></category>
		<category><![CDATA[Private governance]]></category>
		<category><![CDATA[Regulation]]></category>

		<guid isPermaLink="false">https://igopp.org/les-enjeux-de-la-diversite-a-la-direction-et-aux-conseils-dadministration-des-societes-ouvertes-2/</guid>
		<description><![CDATA[In June 2009, IGOPP published a Policy Paper on “The Status of Women on Boards of Directors in Canada: Calling for Change”. Almost 12 years later, the issue of diversity on boards of directors still remains partly unresolved. Indeed, women’s representation on boards of directors has doubled during this period [from 15% in 2008 to [&#8230;]]]></description>
		<content><![CDATA[In June 2009, IGOPP published a Policy Paper on “The Status of Women on Boards of Directors in Canada: Calling for Change”. Almost 12 years later, the issue of diversity on boards of directors still remains partly unresolved. Indeed, women’s representation on boards of directors has doubled during this period [from 15% in 2008 to 29.58% in 2020] but the target of 40% gender diversity set in the IGOPP Policy Paper has not yet been achieved.

But by now a broader definition of diversity is proposed, a definition which targets an adequate representation of several groups making up the general population of the society where an organization is domiciled.

Responding to this emerging trend, the government of Canada amended the Canada Business Corporations Act (CBCA) to foster an increased diversity on boards of directors as well as in the senior management of public corporations. These changes, which came into effect on January 1, 2020, aimed at increasing the representation of women but also of Aboriginal people, persons with disabilities and members of visible minorities. These new legal stipulations apply to federally incorporated corporations listed on a stock exchange. Thus 78 of Canada’s largest corporations, drawn from the S&#38;P/TSX index were subjected to these new requirements.

The following table captures, in raw form, the source of disquiet about representation:



This report begins with a brief comparison of the Canadian law with that of other countries. Then we sketch an overview of the representation of designated groups on boards and senior management of the companies subjected to the new legal stipulations. We collected the information which these 78 companies disclosed in 2020 and compiled the above table. We then carried out further analyses factoring in educational variables and age.

Several observations emerge from this analysis; the most significant ones are as follows:

 	Canada is at the forefront of this quest for diversity beyond the representation of women on boards of directors to include diversity in the senior management of companies, as well as the representation of Aboriginal peoples, persons with disabilities and persons belonging to visible minorities. The Canadian government has opted for a flexible approach, emphasizing disclosure, rather than a quota approach, as advocated in some other jurisdictions.
 	The subject companies have interpreted very freely the regulation concerning the number of members of senior management who must be considered for disclosure. The definition in the regulations provides for 5 to 7 senior management members. However, the subject companies defined senior management as made up of some 16 members on average. More than half of the companies seem to have interpreted the regulation incorrectly (but that probably reflects their own internal definition of senior management).
 	Although the gains made over the past decade are notable, much remains to be done in terms of the representation of women on boards of directors as well as in the senior management of companies.
 	Taking into account the variables of age and education, although these two factors are not exhaustive of all factors influencing selection and promotion, we see a clear under-representation of members of visible minorities within the boards of directors
and senior management of publicly traded Canadian companies.

The rate of renewal of board members and senior management is rather slow. Some measures (for instance, quotas, tenure and/or age limit) would accelerate the turnover of board membership but these must be carefully assessed. Absent coercive measures, social systems change over relatively long periods of time.

The laudable goal of increasing the diversity of representation on corporate boards and in the senior management of large corporations will not be achieved without much management goodwill, as well as investors and government prodding, particularly so when that goal includes not only the representation of women but also that of various other groups making up a society.
]]></content>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Brief review of empirical studies on the economic performance of dual-class companies: 2007 to 2018</title>
		<link>https://igopp.org/en/empirical-studies-on-dual-class-companies-2007-to-2018/</link>
		<comments>https://igopp.org/en/empirical-studies-on-dual-class-companies-2007-to-2018/#respond</comments>
		<pubDate>Fri, 04 Jan 2019 22:28:11 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Shareholders]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=10572/</guid>
		<description><![CDATA[]]></description>
		<content><![CDATA[
]]></content>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Pershing Square, Ackman and CP Rail: A Case of Successful &#8221;Activism&#8221; ?</title>
		<link>https://igopp.org/en/cp-rail-a-case-of-successful-activism-2/</link>
		<comments>https://igopp.org/en/cp-rail-a-case-of-successful-activism-2/#respond</comments>
		<pubDate>Fri, 17 Nov 2017 20:46:00 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Activism]]></category>
		<category><![CDATA[American governance]]></category>
		<category><![CDATA[Chief Executive Officer]]></category>
		<category><![CDATA[Hedge funds]]></category>
		<category><![CDATA[Proxy Advisors]]></category>

		<guid isPermaLink="false">https://igopp.org/pershing-square-ackman-and-cp-rail-a-case-of-successful-activism/</guid>
		<description><![CDATA[Pershing Square, an activist hedge fund owned and managed by William Ackman, began hostile maneuvers against the board of CP Rail in September 2011 and ended its association with CP in August 2016, having netted a profit of $2.6 billion for his fund. This Canadian saga, in many ways, an archetype of what hedge fund [&#8230;]]]></description>
		<content><![CDATA[Pershing Square, an activist hedge fund owned and managed by William Ackman, began hostile maneuvers against the board of CP Rail in September 2011 and ended its association with CP in August 2016, having netted a profit of $2.6 billion for his fund. This Canadian saga, in many ways, an archetype of what hedge fund activism is all about, illustrates the dynamics of these campaigns and the reasons why this particular intervention turned out to be a spectacular success… thus far.

Governance at CP Rail

In 2009, the Chairman of the board of CP Rail asserted that the company had put in place the best practices of corporate governance; that year, CP was awarded the Governance Gavel Award for Director Disclosure by the Canadian Coalition for Good Governance. Then, in 2011, CP ranked 4th out of some 250 Canadian companies in the Globe &#38; Mail Corporate Governance Ranking1. Yet, this stellar corporate governance was no insurance policy against shareholder discontent.

Indeed, during the summer of 2011, a group of 20 portfolio managers were gathered in a New York City bistro to discuss opportunities in the transportation sector. During pre-diner cocktail, one of the investors spoke critically about the governance of CP. “He was exasperated that the company’s board had not thrown out the chief executive, Fred Green.”

That investor admitted that the previous winter had been grueling for rail transportation, but blaming the weather to justify CP’s poor results was, according to him, just another lame excuse made by Fred Green to avoid taking responsibility. His views were shared by many other portfolio managers who turned belligerent about CP’s Board and wondered why no activist fund had yet spotted the opportunity offered by CP. A phone call was made to Paul Hilal, an associate at Pershing Square Capital Management (Pershing Square), an activist hedge fund. That phone call triggered the most highly mediatized proxy contests in Canada. Thou shalt never (henceforth?) underestimate the power of discontented shareholders.

Ackman attacks 

Pershing Square began purchasing shares of CP on September 23, 2011. They filed a 13D form on October 28th showing a stock holding of 12.2%; by December 12, 2011, their holding had reached 14.2% of CP voting shares, thus making PS the largest shareholder of the company.

A few weeks after Pershing Square disclosed its acquisition of CP shares, Ackman asked to meet the Chairman of the Board of CP, John Cleghorn. A meeting was scheduled on November 2, 2011 at the Montreal airport. Ackman reminisced: “Although I’d said we wanted to talk about a management change, he and Fred Green were there. After three of us made a presentation, Mr. Cleghorn said, ‘I’ve spoken to the board and want to let you know we’re 100 percent behind Fred.’ I couldn’t believe the board made its decision before hearing our case."

On December 15, 2011, CP issued a press release announcing the appointment (effective immediately) of Tony L. Ingram and Edmond L. Harris as directors on CP’s Board. "Both Tony and Ed have extensive and valuable railway experience. I am confident that Canadian Pacific will benefit from their operational expertise and sound business knowledge.” said John Cleghorn.

These appointments were a form of concession to Ackman. Tony L. Ingram was the former COO of the CSX,6 while Edmond L. Harris held the same position at the CP for 11 months before retiring. The latter was well respected by the financial analysts and by the industry in general; his (surprise) departure from the CP raised numerous questions at the time since he was closely associated with the potential successful execution of the multi-year plan7 (CP’s strategic plan). These appointments were well received by Ackman, who nonetheless judged them as being too little, too late, and the proxy contest was officially launched.

Read more [1]

[1] https://igopp.org/wp-content/uploads/2017/11/YAllaire_FDauphin_Pershing-Square_CAIA_Q3-2017.pdf]]></content>
		<wfw:commentRss>https://igopp.org/en/cp-rail-a-case-of-successful-activism-2/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Pershing Square, Ackman and CP Rail: A Case of Successful «Activism»?</title>
		<link>https://igopp.org/en/cp-rail-a-case-of-successful-activism/</link>
		<comments>https://igopp.org/en/cp-rail-a-case-of-successful-activism/#respond</comments>
		<pubDate>Fri, 23 Dec 2016 20:46:04 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Publications ]]></category>
		<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Activism]]></category>
		<category><![CDATA[Activisme]]></category>
		<category><![CDATA[American governance]]></category>
		<category><![CDATA[Hedge funds]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=7025</guid>
		<description><![CDATA[Pershing Square, an activist hedge fund owned and managed by William Ackman, began hostile maneuvers against the board of CP Rail in September 2011 and ended its association with CP in August 2016, having netted a profit of $2.6 billion for his fund. This Canadian saga, in many ways, an archetype of what hedge fund [&#8230;]]]></description>
		<content><![CDATA[Pershing Square, an activist hedge fund owned and managed by William Ackman, began hostile maneuvers against the board of CP Rail in September 2011 and ended its association with CP in August 2016, having netted a profit of $2.6 billion for his fund. This Canadian saga, in many ways, an archetype of what hedge fund activism is all about, illustrates the dynamics of these campaigns and the reasons why this particular intervention turned out to be a spectacular success… thus far.

Governance at CP Rail

In 2009, the Chairman of the board of CP Rail asserted that the company had put in place the best practices of corporate governance; that year, CP was awarded the Governance Gavel Award for Director Disclosure by the Canadian Coalition for Good Governance. Then, in 2011, CP ranked 4th out of some 250 Canadian companies in the Globe &#38; Mail Corporate Governance Ranking1. Yet, this stellar corporate governance was no insurance policy against shareholder discontent.

Indeed, during the summer of 2011, a group of 20 portfolio managers were gathered in a New York City bistro to discuss opportunities in the transportation sector. During pre-diner cocktail, one of the investors spoke critically about the governance of CP. “He was exasperated that the company’s board had not thrown out the chief executive, Fred Green” 2.

That investor admitted that the previous winter had been grueling for rail transportation, but blaming the weather to justify CP’s poor results was, according to him, just another lame excuse made by Fred Green to avoid taking responsibility. His views were shared by many other portfolio managers who turned belligerent about CP’s Board and wondered why no activist fund had yet spotted the opportunity offered by CP. A phone call was made to Paul Hilal, an associate at Pershing Square Capital Management (Pershing Square), an activist hedge fund. That phone call triggered the most highly mediatized proxy contests in Canada. Thou shalt never (henceforth?) underestimate the power of discontented shareholders. Read more [1]

[1] https://igopp.org/wp-content/uploads/2017/01/IGOPP-Allaire-and-Dauphin-CP-Case-November-28-2016-SSRN.pdf]]></content>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Corporate Governance: looking backward, looking forward</title>
		<link>https://igopp.org/en/corporate-governance-looking-backward-forward/</link>
		<comments>https://igopp.org/en/corporate-governance-looking-backward-forward/#respond</comments>
		<pubDate>Wed, 07 Dec 2016 16:34:27 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Publications ]]></category>
		<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[American governance]]></category>
		<category><![CDATA[Financial crisis]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Public governance]]></category>
		<category><![CDATA[Regulation]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=6909</guid>
		<description><![CDATA[Once upon a time, the governance of publicly listed corporations was a friendly, fraternal affair with few requirements and little risk. Then, during the 1980s, a group of funds (leveraged buyout funds) sprouted up claiming that this sort of governance deprived shareholders of the full economic value of the business they had invested in. Cozy [&#8230;]]]></description>
		<content><![CDATA[Once upon a time, the governance of publicly listed corporations was a friendly, fraternal affair with few requirements and little risk. Then, during the 1980s, a group of funds (leveraged buyout funds) sprouted up claiming that this sort of governance deprived
shareholders of the full economic value of the business they had invested in. Cozy boards and complacent management, these funds claimed, were not motivated to maximize value for shareholders.

Their solution was a dramatic one: this system must be changed by a "revolution" in governance made possible only by the full privatization of these companies. Having access to large pools of funds and the borrowing capacity of the targeted companies, these LBO “revolutionaries” carried out a wave of hostile takeovers of companies and their subsequent privatization. That period was unusual for the large number of transactions – nearly always hostile – to privatize public companies.

This "revolution", which was to some degree successful and did leave a lasting impact on corporate governance, eventually faded away as a result of two events at the end of the 1980s and beginning of the 1990s:

 	The financing of these LBO transactions relied heavily on another "innovation", namely junk bonds, whose principal protagonist was Michael Milken. However, at the end of the 1980s, a series of financial scandals implicated several major actors in the
financial world, including Milken himself who was charged and eventually served jail time. This criminal turn of events had the effect of immediately drying up the junk bonds market as a source of financing for LBOs.
 	Legislators in 30 or so U.S. states, prompted by an electorate that was shocked and outraged by the impact on their communities of these hostile "privatizations", adopted laws giving boards of directors increased authority and leverage to repel any
unwanted takeover bids.

However, stung by the arguments of LBO funds, boards of directors would henceforth set compensation of senior executives in a way that would motivate them to create economic value for shareholders. That meant, inter alia, generous helpings of stock options so that management would work hard to push up the stock price, pleasing shareholders and ipso facto enriching themselves.

This radical change in executive compensation was strongly supported, and even instigated, at the time by institutional investors. As executive compensation shot up, public companies, beginning in 1992, were obliged to disclose detailed information about the compensation of their five best-paid executives.

Thus, during the 1990s, hostile takeover bids quickly dried up and were replaced by transactions that had become "friendly"1. The aggressive, “hostile” LBO funds morphed into “gentle” Private Equity Funds (PEF).

Board governance reverted to the quiet, collegial nature of the old days, but failing inexcusably to factor in the increased risk of management misbehaviour brought about by a system of compensation now loaded with stock options. This risk went unforeseen until the tornado known as Enron, WorldCom, Global Crossing, et alia caught boards of directors by surprise in 2001.

The American political and regulatory system, sensing that accusations of laxity were forthcoming, adopted the Sarbanes-Oxley (SOX) Act in short order in July 2002. Thus, having interpreted the Enron/WorldCom scandals as being largely attributable to accounting flaws and management malpractices resulting from overly generous incentives, SOX imposed new safeguards, including the following:

 	Independence requirement for audit committee members;
 	Responsibility of audit committees for the quality of internal controls;
 	Explicit responsibility of the CEO and CFO to certify that the financial statements adequately represent the corporation's financial position;
 	Full disclosure of off-balance sheet transactions;
 	Creation of the Public Accounting Oversight Board;
 	Severe restrictions on other services that audit firms can provide to corporations for whom they assume audit responsibility;
 	More expeditious filing of insider trading reports;
 	The reimbursement of any variable compensation obtained according to financial statements that were subsequently restated;
 	The prohibition of loans to senior management and directors;
 	Longer prison terms for financial fraud.

Not only did the bankruptcies of Enron and WorldCom lead to unusually long prison sentences for the officers of these corporations but board members were required to pay out of their own pockets fines of $13 million and $18 million respectively. Although there was no equivalent jail time or monetary fines in other cases, the Enron/WorldCom sagas triggered a shock wave among the officers and board members of U.S. public corporations.

Having to comply with the SOX requirements, worried about the risks they now ran for any laxity in governance, submerged under an avalanche of measures, standards and principles of "good governance" put forth by committees of experts, security commissions and the stock exchanges, boards of directors engaged in a sweeping reform of the governance of public corporations. Boards would henceforth play their role fully and assert a new (or renewed) fiduciary authority over corporate management.

This phenomenon, which first appeared in the U.S., spread like wildfire to Canada and the United Kingdom, and then more slowly to other developed countries. Read more [1]

The opinions expressed in this article are the author's own.

[1] https://igopp.org/wp-content/uploads/2017/01/IGOPP_Rapport_CorporateGovernance_EN_v1.pdf]]></content>
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		<item>
		<title>What’s the risk of losing a significant number of corporate head offices now located in Quebec?</title>
		<link>https://igopp.org/en/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril/</link>
		<comments>https://igopp.org/en/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril/#respond</comments>
		<pubDate>Thu, 29 Sep 2016 16:48:04 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Stakeholders]]></category>

		<guid isPermaLink="false">https://igopp.org/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril-2/</guid>
		<description><![CDATA[More than six months after the fact, the sale of Rona to Lowe’s, a U.S. corporation, continues to generate political controversy. Lowe’s’ first attempt to acquire Rona in 2012 turned more or less hostile in nature, sparking a strong reaction from the Quebec government at the time. The government ordered the financial institutions under its [&#8230;]]]></description>
		<content><![CDATA[More than six months after the fact, the sale of Rona to Lowe’s, a U.S. corporation, continues to generate political controversy. Lowe’s’ first attempt to acquire Rona in 2012 turned more or less hostile in nature, sparking a strong reaction from the Quebec government at the time. The government ordered the financial institutions under its control (Investissement Québec) and pressured those under its influence (the Caisse de dépôt et placement and the Fonds de solidarité de la FTQ) to take up a blocking position in Rona’s shareholdings, which was done to keep the head office in Quebec.

At the time, Lowe’s withdrew from the transaction. But negotiations resumed in 2015, to achieve this time around a “friendly” transaction. Rona’s board of directors eventually approved the sale of the company to Lowe’s, without the Quebec government voicing any objections to the gradual disappearance of Rona’s head office.

Whether as a result of a hostile or friendly process, how many large Quebec corporations are vulnerable to a foreign takeover with the consequent loss, sooner or later, of the strategic functions associated with their head offices?

Read more [1]

Opinions expressed in this paper are the authors’ alone.

[1] https://igopp.org/wp-content/uploads/2016/09/IGOPP_Rapport_SiegesSociaux_EN_v3_WEB-a.pdf]]></content>
		<wfw:commentRss>https://igopp.org/en/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
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		<title>Enhancing the Dynamics of Boards of Directors</title>
		<link>https://igopp.org/en/enhancing-the-dynamics-of-boards-of-directors/</link>
		<comments>https://igopp.org/en/enhancing-the-dynamics-of-boards-of-directors/#respond</comments>
		<pubDate>Mon, 27 Jun 2016 19:45:19 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Chairman of the Board]]></category>
		<category><![CDATA[Diversity]]></category>
		<category><![CDATA[Independence of Board members]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=6444</guid>
		<description><![CDATA[Board members with extensive experience readily observe, and often comment, that the quality of governance and a board’s effectiveness result as much from subtle, dynamic, intangible factors as from strict observance of the fiduciary and formal aspects of governance. These factors take shape in social interaction among members, in the style of the Chair’s leadership, [&#8230;]]]></description>
		<content><![CDATA[Board members with extensive experience readily observe, and often comment, that the quality of governance and a board’s effectiveness result as much from subtle, dynamic, intangible factors as from strict observance of the fiduciary and formal aspects of governance.

These factors take shape in social interaction among members, in the style of the Chair’s leadership, in what happens before and after formal meetings and during discussions at board and committee meetings. That observation is pertinent for every type of organization, be it a listed corporation, a public institution, a State-owned corporation, a cooperative or a non-profit organization.

Thus, initiatives, mechanisms and processes to improve the dynamic interaction and interplay among board members should enhance a board’s effectiveness. Yet, this particular aspect of governance has been the subject of very few empirical studies because, for reasons of confidentiality, boards cannot readily give researchers direct, live, access to board meetings and ancillary board activities.

One notable exception is Richard Leblanc’s doctoral thesis. Due to the network of contacts of his thesis director and co-author, James Gillies, he was able to observe a certain number of boards in action. In 2005 they published Inside the Boardroom, a book which offers an interesting typology of the dominant behaviours of members during board meetings. Focused on what could be observed at formal board meetings, the work by Leblanc and Gillies provides some insight about but one particular facet of board dynamics.

No other empirical study has been conducted on the issue since then.

Our Institute undertook to shed some light on these subtle, dynamic, intangible factors and, possibly, offer suggestions to directors and board chairs on ways to enhance the quality of governance.

Read more [1]

[1] https://igopp.org/wp-content/uploads/2016/09/IGOPP_Rapport_PerformanceDynamiqueConseilsAdmin_EN_v2_WEB.pdf]]></content>
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		<slash:comments>0</slash:comments>
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		<title>Two flawed studies about controlled corporations by ISS and IRRCI</title>
		<link>https://igopp.org/en/two-flawed-studies-about-controlled-corporations-by-iss-and-irrci/</link>
		<comments>https://igopp.org/en/two-flawed-studies-about-controlled-corporations-by-iss-and-irrci/#respond</comments>
		<pubDate>Thu, 21 Apr 2016 19:06:35 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Institutional investors]]></category>
		<category><![CDATA[Proxy Advisors]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=6215</guid>
		<description><![CDATA[The performance of controlled companies has been a contentious issue. For different reasons, various parties have worked hard at convincing the investor class that capital structures other than one-share, one-vote would produce inferior results for shareholders. Consequently, most investment funds frown upon such structures, at best tolerate them, and, at worst, have adopted policies of non-investment in these companies. [&#8230;]]]></description>
		<content><![CDATA[The performance of controlled companies has been a contentious issue. For different reasons, various parties have worked hard at convincing the investor class that capital structures other than one-share, one-vote would produce inferior results for shareholders. Consequently, most investment funds frown upon such structures, at best tolerate them, and, at worst, have adopted policies of non-investment in these companies.

The Investor Responsibility Research (IRRC) Institute and ISS, the proxy management firm, have been most strident in their opposition to “controlled” corporations and have produced studies supposedly buttressing their position.

Thus, in October 2012, they published a study purporting to assess the relative performance of controlled and non-controlled companies listed on exchanges in the United States (the S&#38;P 1500 Composite Index).

The study received little notice in the media but circulated widely in the financial community as it claimed that the “findings” demonstrated the inferior performance of “controlled” corporations.

The statistical findings of this so-called research are summarized in the following table (page 8 of their report).

Read more [1]

[1] http://Two%20flawed studies about controlled corporations by ISS and IRRCI]]></content>
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		<slash:comments>0</slash:comments>
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