TORONTO (Reuters) - The Toronto Stock Exchange is tightening standards for how boards at companies listed on its markets are elected, introducing rules that will eliminate slate voting and force directors to stand for election each year.
Exchange owner TMX Group (X.TO) said on Thursday the changes are part an ongoing review of its markets’ rule book. The changes will come into effect on December 31, and have been approved by the Ontario Securities Commission, TMX said.
“These changes bring additional transparency to the board selection process and help to strengthen our markets’ reputation while aligning our practices to other major international jurisdictions,” Kevin Cowan, president of TSX markets and group head of equities, said in a statement.
Among the rules is a requirement that listed companies elect directors individually, which will eliminate voting for a group of directors, or a “slate”, with one vote.
Forcing directors to face election each year means companies will not be able to stagger their boards so that only part of the board is elected each year.
The new rules will also require listed companies to publicly disclose how many votes each director receives.
TMX also said it is seeking comment on amendments that would force companies to adopt a majority voting policy for uncontested director elections.
Under the current rules, shareholders can vote for a candidate or to withhold their vote, but a candidate running uncontested can win even if there are more votes withheld than votes in favor.
Reporting By Cameron French; Editing by Peter Galloway