Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50881
As more companies seek out new business, especially emerging markets, the practice of bribery to secure contracts is ubiquitous; yet any Canadian company that has any business ties to a country that prosecutes such corruption — be it even a single U.S. employee — could be charged, and the fines are significant. "If you do have emerging market business, even if you're the Bank of Nova Scotia or a middle-market company, you need a very good FCPA compliance program to protect your board and your officers," says Smith. Vanessa Grant, a partner at McCarthy Tétrault LLP in Toronto who teach- es securities law at Queen's University Faculty of Law, acknowledges authori- ties have heightened their diligence. "In light of the recent recession and high- profile securities fraud actions, regulators are continuing to increase their enforce- ment divisions and are scrutinizing issu- ers more carefully," she says. "For corpo- rate counsel, this is a good time to look afresh at the way you're approaching your corporate disclosure and compliance." Grant also points out that Canada is indeed moving forward with a nation- al securities regulator, earlier this year announcing the creation of the Canadian Securities Transition Office. A national regime could include swifter penalties for violations, she says. "Canada is the sub- ject of critique for its 'enforcement mosa- ic.' Currently, securities enforcement is provincial and one of the things Canada has been criticized for is that our enforce- ment is not very strong." The securities commissions and the courts have also opened the door for securities-related class actions, which could have significant implications for publicly traded companies, she notes. In-house counsel for reporting issu- ers will likely want to continue their focus on ensuring they review and, where appropriate, adopt best corporate governance practices as an important way of minimizing the risk of exposure to liability for the company and its direc- tors and officers and, more important- ly, increasing investor confidence. "It's becoming even more important to do regular reviews of the issuer's corporate governance structure, including reviews of periodic and episodic disclosure prac- tices and policies," says Grant. "Research has suggested that investors value good corporate governance. It's also the right thing to do." And there are lots of resources in- house counsel can turn to in reviewing the issuer's corporate governance, she notes. The Canadian Coalition for Good Governance, for instance, regularly pub- lishes best practices in corporate disclo- sures and prepares reports on a number of governance issues such as shareholder voting. Large institutional shareholders, such as the Ontario Teachers' Pension Plan, also provide guidance on corporate governance. Grant says such materials are invalu- able to in-house counsel to help them advise their companies on best practices in order to ensure both transparency and compliance. IH [Across the street, down the block or Canada wide — our commercial team is ready for you. ] For over 100 years, legal professionals have trusted Stewart Title to provide title insurance for their commercial real estate transactions. Some of the world's best hotels, golf courses, resorts, office towers and business centres are insured by Stewart Title. Our global reach and financial strength, combined with the expertise of our Commercial Team, enable us to handle the most complex transactions. With Stewart Title, you can close real estate transactions with security and peace of mind. Visit www.stewart.ca to view some of our recent transactions, or call us at 1-888-667-5151 for a quotation. Untitled-3 1 INHOUSE JUNE 2010 • 4/30/10 12:51:05 PM 45