Canada: mergers, acquisitions and the role of directors

At the end of June, Canada's Competition Policy Review Panel published a report titled "Compete to Win". The report makes many recommendations and of particular interest are those concerning company directors. In a section titled "Strengthening the Role of Directors in Mergers and Acquisitions" (pp. 76-77) the Panel concluded:

the new global context in which mergers and acquisitions (M&As) occur requires that Canada update its regulatory framework to place the directors of Canadian companies on the same footing as their counterparts at Delaware companies".

The Panel recommended:

• Securities commissions should repeal National Policy 62-202 (Defensive Tactics).
• Securities commissions should cease to regulate conduct by boards in relation to shareholders rights plans (“poison pills”).
• Substantive oversight of directors’ duties in mergers and acquisitions matters should be provided by the courts.
• The Ontario Securities Commission should provide leadership to the Canadian Securities Administrators in making the above changes, and initiate action if collective action is not taken before the end of 2008.

For further information see:
Review website | Terms of reference | Report | Review research reports | Earlier consultation paper | Ontario Securities Commission | Canadian Securities Administrators |