Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m M A Y 2 0 1 7 65 financial reporting doesn't improve the quality of information reported. However, the stats in the U.S. from the SEC seem to suggest they are getting a lot of tips. "Ultimately, what companies and their in-house lawyers want to do is control the process," says Campion. Barbara Hendrickson of BAX Securities Law says internal reporting policies and the OSC's whistleblower program don't have to be inconsistent with each other. If an issuer has a robust internal policy, they can potentially deal with issues before they are escalated to the OSC, and most public compa- nies will have a program in their own code of business ethics. "It's a big step to go to the OSC, for anyone," says Hen- drickson. "If people felt there were internal procedures in place and their concerns would receive a fair hearing and there would be no retaliation, then they might be more likely to go internally. I guess the only caveat is how serious it is — that may affect a whisteblower's confidence in the internal control system." Campion does agree a financial rewards program is prob- ably better than what Quebec and Alberta have. From a regulator's perspective, it increases the chance they will come across good and reliable information as opposed to a program where there is no financial incentive. "I do think there is a good balance when you read the vari- ous policies of the OSC and what they will consider in terms of giving a financial reward," she says. In Ontario, general counsel can also be whistleblowers, which Campion says calls into question whether an in-house lawyer would be offside their solicitor-client privilege obliga- tions. If someone made an internal complaint and the company dealt with it internally, there is an existing policy on compa- nies getting "credit for co-operation." The OSC Staff Notice 15-702 Credit for Cooperation program was revised in 2014 and addresses self-disclosure and expectations from market participants in such a situation. However, how it actually works in practical terms is somewhat of a mystery to some in the securities bar. They would like the OSC to be more transparent about what happens when people have self-disclosed under the Credit for Cooperation program or fixed a problem that was detected and then disclosed. Some have asked for examples where the OSC has applied the policy and what some of the fact patterns were when it has been applied. "There is less information than would ultimately be out there, ideally," says Danielle Royal, partner with Stikeman Elliott LLP. She says there should be more transparency in this area. "If you think about compliance as a tool box, the whistleblower program is just one piece of it. We know the enforcement authority doesn't have the resources to track everything, so I think it's in everyone's interest to provide incentives to the companies to do their own internal reviews and enforcement." Royal says she understands the rationale for a whistle- blower program, but she says it will be "a more interesting conversation to have in a year" to see if the OSC has struck the right balance. L E G A L R E P O RT \ W H I T E C O L L A R IF YOU THINK ABOUT COMPLIANCE AS A TOOL BOX, THE WHISTLEBLOWER PROGRAM IS JUST ONE PIECE OF IT. WE KNOW THE ENFORCEMENT AUTHORITY DOESN'T HAVE THE RESOURCES TO TRACK EVERYTHING. DANIELLE ROYAL, Stikeman Elliott LLP CORPORATE COUNSEL Connect with Find more than 4,100 corporate counsel and over 1,500 organizations along with fresh editorial content, information on deals and links to important resources. Lexpert.ca/ccca ntitled-2 1 2017-04-17 8:51 AM

• Cover