Prof. Anita Anand reviews research on link between better corporate governance and performance

Thursday, February 14, 2013

Prof. Anita Anand was quoted in the Globe & Mail on February 13, 2013 in “A Business Case for a Better Boardroom.” The article considered academic research on the link between better corporate governance practices and financial and shareholder results.  The article refers to Anand’s important findings: “research has found connections between board composition, ownership structure and the presence of institutional investors and ‘valuation outcomes’ for a company.

Prof. Anita Anand: "Telus win scores for ­shareholders"

Thursday, October 18, 2012

In a commentary in the Financial Post, Prof. Anita Anand analyzes the history of the merging of dual-share structures in Canada through the lens of the recent decision regarding Telus ("Telus win scores for ­shareholders," Oct. 18, 2012).

Read the full commentary on the Financial Post website, or below.

Backing the BCE Bondholders - Beyond Law and Contract

Anita Anand
Thursday, May 22, 2008

On May 21, 2008, the Quebec Court of Appeal reversed the lower court finding in the BCE Inc. case. BCE proposed an arrangement in which certain bondholders stood to be disadvantaged because the level of BCE's debt would be increased.  The higher level of debt would in turn decrease the value of the existing debt as well as occasion a loss of investment grade status. The Court of Appeal held that the bondholders' interests must be considered when the board is discharging fiduciary duties.  But the Court has pushed the concept of fiduciary duties into new territory, a move that seems to stretch existing law.

The Court conceives directors' fiduciary duties broadly, criticizing the BCE board for not considering how the plan of arrangement at issue might be unfair to bondholders.  The Court relies on the SCC decision in Peoples v Wise (SCC 2004). However, Peoples in my view misconceives fiduciary duties, thus creating a potential domino effect for future decisions like BCE. The problem with Peoples is that it interprets directors’ fiduciary duties as applying to a broad range of corporate stakeholders (creditors, suppliers, consumers, employees, enivronmental groups etc.), thus watering down the duty significantly: a duty owed to everyone is in effect a duty to no one.  But the BCE board was seeking to maximize shareholder value in a change of control transaction, something that most lawyers take to be settled law. 

Unsecured Creditors Have the Most to Lose

Wednesday, November 12, 2008

This commentary was first published in the Financial Post on November 4, 2008.

Last August, 4,500 Zoom Airlines passengers found themselves stranded across North America, the West Indies and various European countries when the airline ran out of money and grounded its planes. Passengers were left to pay for their return journey home and figure out how to recover the payments they had made to the airline. Their prospects were dim.

Since Zoom Airlines had declared bankruptcy, the best the passengers could expect was to be treated as unsecured creditors of the airline-- ranking at the bottom of the ladder in the distribution of Zoom's assets. Passengers must yield to the prior claims of Crown trust claims (for unremitted employment insurance premiums and tax deductions), secured creditors and preferential creditors. Typically, unsecured creditors recover no more than five cents on the dollar of their claims and often nothing at all.

Backing the BCE Board

Anita Anand
Friday, December 19, 2008

Today, the Supreme Court of Canada released its long-awaited judgment in the BCE case.  The Supreme Court had previously indicated that it would overturn the decision of the Quebec Court of Appeal but today we found out the bases on which it did so.  We also found out the current thinking from the Court on directors duties.  The gist of the Court’s decision is two fold.  First, it upheld the principle that the board owes its fiduciary duty to the corporation not to any one particular stakeholder group.  In addition, the Court held that there is a distinction between the legal considerations applicable to the oppression remedy and CBCA arrangements that the Quebec Court of Appeal had overlooked.  The Supreme Court held true to the wording of the corporate statute with perhaps one exception: it introduced the concept of the corporation as a “responsible corporate citizen”, thereby raising questions about what this term means in terms of directors’ duties generally.

BCE Decision Roundtable, March 27, 2009

Friday, February 13, 2009

Faculty of Law, University Of Toronto
Flavelle House, 78 Queen's Park,
McCarthy Tétrault Classroom (FLA) 

In December 2008, the Supreme Court of Canada released its reasons in the highly publicized BCE case, affirming that Canadian corporate directors owe their fiduciary duty to the corporation and only the corporation. The decision stands to have a significant impact on merger and acquisition transactions in Canada, and is of fundamental importance to boards of directors as well as to shareholders, creditors and corporate stakeholders generally.  We look forward to an interactive roundtable discussion on the implications of the Supreme Court's decision.

Read more

 

The Arab Demonstrations, the Sub-Prime Mortgage Crisis, and "Black Swans"

Mohammad Fadel
Thursday, February 3, 2011

This commentary was first published on the Foreign Policy magazine website on Feb. 2, 2011.

The nationwide decline in housing prices that began in 2006 was supposed to be, we were told, impossible. Because its impact was limited initially to the sub-prime mortgage market, which was a relatively small part of the overall home-mortgage market, policy makers at the Department of the Treasury and the Federal Reserve assured us that its effects would be contained. That prediction, we now know, turned out to be horribly wrong.    

So, too, the revolutions in Tunisia and Egypt were said to be impossible. Even after the shocking events of Tunisia, pundits were quick to deny their relevance to Egypt. Egypt was a much larger country; its population was less educated, less politically savvy, and too habitually passive to become revolutionary; moreover, Egypt's security service was much larger and tougher than those of Tunisia, and in any event the Egyptian military could be relied upon to come quickly to the aid of the regime in the event of any crisis. Indeed, some pundits were quick to dismiss Tunisians entirely from the Arab world.

Who Can Regulate Canadian Securities?

Monday, July 25, 2011

This commentary by Prof. Jacob Ziegel was first published in the National Post on July 15, 2011.

On April 12 and 13, the Supreme Court of Canada held a two-day hearing on a Reference from the federal government asking the Court to determine the constitutional validity of the proposed Securities Act published by the federal government in May, 2010. The question all the parties to the hearing must now be asking themselves is how the Court is likely to respond to the Reference.

The need for federal securities legislation has been discussed for at least 30 years, yet successive Liberal and Conservative governments refused to bite the bullet. The Harper administration showed greater mettle and became convinced that a national securities regulator was essential for Canada in light of the financial crisis that gripped North America, and much of the rest of the world, in 2007 and 2008. It was also the solution recommended by three federal task forces that were established between 2003 and 2009.

The Canadian Corruption of Foreign Public Officials Act: Mandatory Risk Assessment

Kenneth Jull
Tuesday, December 20, 2011

Kenneth Jull is an adjunct professor at the University of Toronto Faculty of Law, teaching the course "Financial Crimes and Corporate Compliance".

The Canadian Corruption of Foreign Public Officials Act ("CFPOA") has been in force since 1999.  In June of 2011 the CFPOA  streaked across the radar screens of compliance officers when Niko Resources Ltd. ("Niko"), a Canadian energy company, plead guilty and paid a fine of almost $10 million  as a result of bribes paid to a Bangladeshi official.  The bribes included a luxury SUV [Toyota Land Cruiser] and a trip to New York and Calgary. 

The large fine is only half of the story. Niko Canada and its subsidiaries were placed on probation requiring that the companies develop compliance procedures based on risk assessment.   The concepts in the prior sentence bear repeating as they are novel in Canada.  The Order pierces the corporate veil to include subsidiaries, places a corporation on probation (as now authorized by the Criminal Code sentencing provisions dealing with organizations) and requires a system of risk assessment. The following paragraph from the probation Order demonstrates the extent to which risk assessment is now a mandatory element of compliance in the anti-corruption arena:

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