You get the feeling listening to activist investor Bill Ackman that we might see him on another Canadian proxy fight, as he said in Toronto Thursday that the Canadian system is far better for activists than the U.S.
Mr. Ackman was in Toronto for the Ontario Securities Commission's annual Dialogue conference. In a panel discussion hosted by OSC chairman Howard Wetston, Mr. Ackman praised the Canadian system.
He pointed to less powerful poison pills, a higher disclosure limit for ownership (which his firm fought to maintain) and a lack of staggered boards.
What comes across in comments from the head of Pershing Square Capital Management is a commitment to pure proxy fights. He doesn't want payment for votes. He wants record dates closer to meetings to limit empty voting. He doesn't believe in an activist paying director nominees.
At first, the panel appeared to be set up as a standoff between Mr. Ackman and panelists Sharon Geraghty, one of Canada's most respected merger lawyers, and U.S. law professor Roberta Karmel. Mr. Ackman was pushing a shareholder primacy point of view for board duties while his colleagues on the panel took a more holistic stance that a board's duty is broader. Ms. Geraghty pointed to Canadian corporate law, and also to the notion that companies have a social function.
But as the panel wore on the group found itself agreeing often on areas such as the issue of empty voting (though disagreeing on finer points of defining it).
Among Mr. Ackman's other points were that it is a "terrible, terrible system" when directors essentially nominate themselves and run unopposed. He and the panel seemed to like the Scandinavian system of large shareholders playing a much more significant role.
Mr. Ackman also had an interesting take on proxy advisers, who take heat for being too powerful (and as Ms. Geraghty suggested, for being not always up to the task).
He suggested that proxy advisors give shareholders "cover" to vote against management. Shareholders are afraid that voting against management will cost them access to the company. So when an advisor like Institutional Shareholder Services (ISS) recommends vote against management's proposal, that gives the shareholder an excuse.
Better yet, Mr. Ackman said, would be to ensure votes are anonymous. Then the issue of potential management retribution goes away.