Magna International Inc.
A Board Games score of 85 would be considered a strong performance for most companies, but for Magna it represents a remarkable turnaround from a score of 44 a mere two years ago. Among the changes, Magna famously got rid of its dual-class shares in a controversial deal with founder Frank Stronach; it adopted shareholder democracy practices such as majority voting and say on pay; and it improved its board with a crop of new directors who replaced long-time hands such as Mike Harris. The result is a far more modern approach to board governance. Finally.
Vermilion Energy Inc.
With shareholder voting proxy circulars expanding like balloons, it is a valuable service to shareholders to offer a brief "executive summary" of key points. Vermilion's four-page summary includes a stripped-down executive pay chart and a summary of details about director nominees. Many investors will likely read the summary when they wouldn't have otherwise tackled any of a daunting 100-page document. And for disclosure wonks, the details all follow on the remaining 96 pages. A win-win.
In an interesting new twist on disclosure, some companies – including Cineplex Inc., Telus Corp. and Guyana Goldfields Inc. – have added a new feature to their proxy circulars disclosing the voting results for each director in the prior year's board election. The disclosure is especially valuable considering the only other way to find voting data is to search for relatively obscure regulatory filings which some investors may find difficult to locate. It's a thumbs up for shareholder democracy.
Canadian Imperial Bank of Commerce
Shareholders may not care that CEO Gerry McCaughey sold all of his CIBC common shares, but they deserve clear disclosure. Mr. McCaughey liquidated his holdings in 2010 and 2011 for "financial planning purposes" but still holds share units, which were granted by the bank and must be held until they pay out or he leaves the company. CIBC's last proxy circular said Mr. McCaughey owned $34.8-million in equity, but it did not break down the total between shares or share units, so readers could not know he held no common shares without doing other independent research. We'd call that a disclosure gap.
CEOs on compensation committees
A decade after Sarbanes-Oxley ushered in a slew of governance reforms, there are still S&P/TSX composite index companies whose CEOs are also members of their own compensation committees. According to their last proxy circulars, they include Clay Riddell of Paramount Resources, Lyle Michaluk from Poseidon Concepts, and George Fink of Bonterra Energy. The practice has been criticized because the committee sets policies that have an impact on the CEO, even if he avoids discussions about his own pay. Hey, 2001 called – it wants it governance back.