Corporate Governance in Canada
Canada's system of corporate governance is derived from the British common law model and strongly influenced by developments in the United States. While corporate governance practices in the United Kingdom and the United States are similar in many respects, where there are differences, Canadian practice usually falls somewhere in between. For example, a Canadian corporation is more likely than a US corporation to have a chair who is not the CEO, and typically has fewer executives on the board than a UK corporation.2
Under Canada's Constitution, provincial governments have exclusive power over property and civil rights within the province. As a result, corporations may choose to incorporate under federal corporate law or under the corporate laws of any of the 10 provinces in Canada. In addition, securities law in Canada is regulated by securities administrators in Canada's 10 provinces and three territories. However, the federal governments and five provincial governments are collaborating on a cooperative capital markets regulatory system.3
Corporate governance practices in Canada are shaped by legal rules and best practices promoted by institutional shareholder groups, the media and professional director associations such as the Institute of Corporate Directors. Sources of legal rules include provincial corporate statutes, securities laws and rules, stock exchange requirements and common law, as well as a wide variety of other regulatory statutes, regulations and policies. The 10 provincial securities commissions are very active in corporate governance matters, which often overlap corporate law areas of concern.
Canadian corporate governance has also been influenced by the high proportion of public corporations in Canada that have a dominant or controlling shareholder, either through equity ownership or the ownership of multiple voting rights.
Canadian institutional investors have a profound influence on Canadian corporate governance practices, including through a national institutional investor organisation formed to promote good governance practices in corporations whose shares its members own. This organisation, the Canadian Coalition for Good Governance, comprises approximately 50 members, including many of Canada's largest institutional investors, collectively managing almost C$4 trillion in assets, and has pursued an organised programme of articulating its views and encouraging best practices generally without resorting to proxy battles.
Resources:
More detailed information regarding corporate governance rules applicable to listed companies in Canada is available at https://thelawreviews.co.uk/edition/the-corporate-governance-review-edition-9/1189443/canada
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Contact
Canadian Coalition for Good Governance
PO Box 22, Suite 3304
20 Queen St W
Toronto ON M5H 3R3
Telephone: (416) 868-3576
Codes
Related Working Papers
Research Members
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Randall Morck
Stephen A. Jarislowsky Distinguished Chair in FinanceSchool of Business, University of AlbertaResearch Member -
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Yrjö Koskinen
Professor of FinanceHaskayne School of Business, University of CalgaryResearch Member -
Kai Li
Canada Research Chair in Corporate Governance, W.M. Young Professor of Finance, ProfessorUBC Sauder School of BusinessResearch Member -
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Lilian Ng
Scotiabank Chair in International FinanceSchulich School of Business, York UniversityResearch Member -
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Cristie Ford
ProfessorUniversity of British Columbia, Peter A. Allard School of LawResearch Member
