On April 11, the Canadian Coalition of Good Governance (CCGG) released draft guidelines respecting the governance of controlled corporations. The document, which relates only to issuers controlled through the holding of common shares (guidelines for dual class share companies are expected in the future) modifies certain guidelines found in CCGG's 2010 Building High Performance Boards to "ensure that the legitimate ownership interests of a controlling shareholder are not in conflict with a guideline designed for widely held issuers."

Specifically, the guidelines address issues respecting: (i) shareholder democracy and the ability of minority shareholders to express their views even where a controlling shareholder holds 50% or more of the voting shares; (ii) board composition and the limitations on the number of related directors (directors that are significant owners of the controlling shareholder, directly or indirectly employed by the controlling shareholder or its significant shareholders, or immediate family members of the ultimate controlling shareholder); (iii) the independence of the Chair of the Board; (iv) related directors on board committees; (v) assessment of the CEO and plans for succession; (vi) and shareholder engagement. The CCGG is accepting comments on the draft guidelines until May 16 and intends to publish the final version in late June 2011.

Notably, the current version of National Policy 58-201 Corporate Governance Guidelines, enacted in 2005, discusses the CSA's intention to examine the governance of controlled companies and consider whether to change how NP 58-201 and NI 58-101 Disclosure of Corporate Governance Practices treat controlled companies. To that end, amendments to Canadian public company governance and independence requirements, which included, among other things, amendments intended to reflect the realities of controlled issuers, were published by the CSA in December 2008. The proposed changes to the corporate governance regime, however, were ultimately deferred.