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 should defer to the Supreme Court of Canada’s interpretation of the Canada Business Corporations Act (CBCA) and leave decisions concerning takeover bids to target directors. But he does not address the fact that the current regulatory treatment of poison pills implements our takeover bid legislation.”

The Supreme Court does not administer this legislation; securities commissions are mandated to do so. In fulfilling this responsibility, they are not “placing themselves above the Supreme Court” in interpreting the CBCA. They are applying securities legislation, in this case in the manner contemplated by the Parliament of Canada when, in 2001, it repealed the CBCA’s takeover bid provisions to leave takeover bid regulation,including the then well-established regulation of poison pills, to provincial securities regulators” …  Read More