Issuers must not construct mechanisms that entrench existing management

Welcome To the WIN!!! St. Elias Mines HUB On AGORACOM

Keep in mind, the opinions on this site are for the most part speculation and are not necessarily the opinions of the company WITHOUT PREJUDICE

Reply New Message

Prev Message Back To Forum Threaded View Next Message

sculpin

Rank: President [?]

Points: 56650 [?]

Votes: 339 Score: 3.4 [?]

Your Vote:

Please Log In to Vote

Did you know? You can earn activity points by filling your profile with information about yourself (what city you live in, your favorite team, blogs etc.)

Issuers must not construct mechanisms that entrench existing management

posted on Mar 22, 2014 08:33PM

If we read this rule below about entrenching management, we see the words "must not construct mechanisms". By not implimenting a "Majority Voting Policy", management has "constructed " a mechanism that will allow current management to remain entrenched in their current positions. We see that it is not allowed by the said policy, we also see that where the absence of a Majority Voting Policy has been constructed, there may have to be another AGM with a more democratic voting process.

To further the argument, management was in receipt of the "Majority Voting Policy request, they had to take action(construct), to either impliment the policy or not, they obviously chose to construct and reinforce the current standard that leaves management entrenched by only receiving 1 "for" vote. An entrenching mechanism as such, leaves it almost impossible to ever remove an undesirable BOD, and thus, is entrenching.

TSXV Issuers: Please take note of the following as you prepare for your next Annual General Meeting - as you may be required by the TSXV to hold another shareholder meeting should you not meet the Policy requirements.

Issuers are reminded that the TSX Venture Exchange Policy 3.1, Section 19.6 Corporate Governance guidelines states:

"Issuers must not construct mechanisms that entrench existing management such as staggered elections of the board of Directors or the election of a slate of Directors if securityholders are not permitted to choose whether to elect the board as a slate (i.e. as a group in its entirety) or to elect Directors individually."

The differences between the 2 methods being:

Slate Voting: securityholders cast one vote "for" or "withhold" for all proposed directors. All nominated directors are therefore elected if the slate is elected
Individual Elections: allows securityholders to cast one vote "for" or "withhold" for each proposed board nominee

If issuers do not comply with the policy, the TSXV may require you to hold another shareholder meeting which complies with the requirements of Policy 3.1.

Please speak with your legal counsel to ensure you are in compliance with the TSXV requirements.