IIROC publishes corporate governance review report
According to IIROC's Recognition Order, IIROC must review its corporate governance structure within two years of the date of recognition and periodically thereafter. Pursuant to this requirement, IIROC recently completed such a review and published a report assessing the success in meeting its governance principles and making recommendations to "further develop" its governance structure. The report, prepared by IIROC's Corporate Governance Committee has been adopted by its board of directors.
The Recognition Order provides that IIROC's governance structure and arrangements must ensure: (i) effective oversight of the entity; (ii) fair, meaningful and diverse representation on the board and any committees of the board, including a reasonable proportion of independent directors; (iii) a proper balance among the interests of the different persons or companies subject to regulation by IIROC; and (iv) that each director or officer is a fit and proper person. The report ultimately concluded that the present governance structure and arrangements ensure that each principle is being met.
That being said, the report recognized that "governance is a dynamic process" that must "evolve and change as circumstances and requirements change". Thus the report includes a number of recommendations, including increasing the maximum size of the board of directors, establishing the position of Vice-Chair, providing a principles-based exception to the definition of independence for board members, providing for a one-year cooling-off period before an individual connected with a dealer, marketplace or IIROC could be considered independent and enhancing the information provided to members in connection with director voting.
