On April 30, 2015, the Canadian Securities Administrators published National Policy 25-201 Guidance for Proxy Advisory Firms. The guidance in NP 25-201 is designed to promote transparency in the processes involved in determining voting recommendations and to enhance market participants’ understanding of the activities of proxy advisory firms.
NP 25-201 addresses conflicts of interest, the determination of voting recommendations, the development of proxy voting guidelines and communications with clients, market participants, other stakeholders, the media and the public. The final version of NP 25-201 published by the CSA incorporates a few key changes to the version of NP 25-201 published for comment on April 24, 2014 that we previously discussed. These changes include: (i) providing that the board of directors of a proxy advisory firm is responsible for managing conflicts of interest; (ii) recommendations on best practices for the development of proxy voting guidelines; and (iii) recommendations that proxy advisory firms provide certain online disclosures about the hiring, training and retention of individuals.
The CSA has noted that they will continue to monitor the proxy advisory industry and developments in other jurisdictions to determine if NP 25-201 adequately addresses Canadian concerns.