Proxy season 2019: ISS and Glass Lewis update guidance

ISS’s gender diversity guideline will be applicable in the 2019 proxy season to “widely held” companies. Widely held companies are defined as S&P/TSX Composite Index companies as well as companies designated by ISS based on ISS client ownership. ISS originally proposed 2019 guidance would be applicable to all TSX companies. Prior 2018 guidance referred to only S&P/TSX Composite Index companies.

ISS recommends withholding voting for the chair of the nominating committee (or, if no nominating committee, the chair of the committee with the closest responsibility to the nominating committee or, if no nominating committee or other committee identified, the board chairman) if company has:

• no female directors; and

• no disclosed written gender diversity policy (which should include measurable goals/targets)

GL may refrain from making an adverse voting recommendation against directors of companies outside the S&P/TSX Composite Index if company has provided sufficient rationale for not having any female directors. Such rationale may include a planned timetable to address the lack of board diversity

ISS will continue in 2019 to recommend voting against “overboarded” directors of TSX-listed companies

2019 guideline amends definition of overboarded to remove previous 75% meeting attendance trigger. As a result, ISS Canadian and U.S. standards are now harmonized by referencing only the number of boards a director sits on

a non-CEO director who serves on more than five public company boards will continue to be considered overboarded

a CEO director who sits on more than two outside public company boards will continue to be considered overboarded and ISS will recommend withholding votes for CEO director in respect of election to outside boards

no change in guidance and GL will generally vote against an ‟overboarded” director. GL defines an overboarded director as a director:

GL generally permits TSX-V directors to sit on up to nine boards. Where directors are on both TSX and TSX-V boards, GL will consider on a case-by-case basis. GL will look at specific duties and responsibilities of executive non-executive directors in determining if an exemption is warranted

commencing in 2019, if companies hold virtual shareholder meetings without giving the option of shareholders attending in person, GL may recommend voting against members of the governance committee. In determining whether to make such a recommendation, GL will examine the company’s disclosure to ensure if shareholders will be afforded the same rights at a virtual meeting as they would have at an in-person meeting