Canadian Lawyer InHouse

I get the sense the CSA is ragging the puck a little bit on this one because I think there isn't a clear answer. There may be some push for better disclosure of the process, of people to understand how the proxy advisors came to their conclusions — I don't know what increased regulation is going to get us — I don't see the benefit. Jonathan Feldman, Goodmans LLP consulting stream to improve your governance score. Their input variables are basically a proxy circular. That does not capture corporate governance." To illustrate, Leblanc points to companies rated highly by the proxy advisory firms that have also had corporate governance failures, such as CP Rail, which was given a governance award by the Canadian Coalition for Good Governance. He says boards are often making decisions based on what ISS and Glass Lewis deem to be appropriate. "It seems directors are right when they contest that these firms are employing a one-size fits all model and are not allowing for customization and not measuring qualitative factors. They can often get it wrong," says Leblanc. Ultimately what may happen is delivery of an improved process, says Ed Waitzer of Stikeman Elliott LLP. "I think where they're going with all of this is more transparency, which is fine but I don't think it really goes to the root issue," he says. When it comes to proxy advisory firms, Waitzer says it's a "focus on form rather than a focus on substance. They're going through the motions a lot of the time — not just the advisers but their customers too. The advisers exist because there is a demand for low-cost advisory services and it's one of many agency conflicts we've created in our rush to regulate corporate governance." Experts say the issues tend to fall more in line with whether issuers have enough ability to interact with the advisory firms during the process. "The timing is often tight," says Allen. "If you look at the number of public companies and the number of circulars and they're all in a concentrated season for what they do I don't think it's significant in terms of the number of mistakes made — but when there is one it's near and dear to everyone's heart." Chris Makuch, vice president of Georgeson Canada, doesn't see the point of proxy adviser regulation. "There are a lot of things that go into proxy voting and whether companies get positive votes or negative GEORGESON - COMPUTERSHARE 1/2 Horz Untitled-3 1 30 • a pr il 2013 INHOUSE 13-02-27 6:00 PM

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