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2010: regulations and recovery in store

|Written By Kelly Harris

Expect 2010 to be a year filled with regulations and improved economic outlook, say senior in-house counsel and law firms.


David Dodge, senior adviser at Bennett Jones LLP, wrote in the 2010 Bennett Jones business forecast that he expects the economy to show growth in the first half of the year.

“Canadian economic growth is likely to rebound to about three and a half per cent [at annual rates] driven by stimulative fiscal and monetary policy, inventory rebuilding, stabilization of the housing sector, and relatively robust growth in emerging markets,” said the former governor of the Bank of Canada.

Other predictions for 2010 include improved access to credit along with continuing insolvencies and restructuring. Increased mergers-and-acquisitions activity due to depressed stock prices, tougher U.S. border and continued buy-American tactics, more class action certifications, and an improvement in commercial real estate markets are all predicted by the law firm.

Borden Ladner Gervais LLP also sees increased merger opportunities and, like Bennett Jones and others, says executive pay will be a hot-button issue for 2010. BLG says the top 10 issues for corporate governance include:

• white-collar crime crackdown;

• mergers-and-acquisitions opportunities;

• employee overtime claims;

• executive pay;

• climate change regulations;

• the business judgment rule dealing with what it means to be a responsible corporate citizen and the impact of the BCE rule on the director’s fiduciary duty;

• harmonized sales tax;

• increased vulnerability to litigation;

• foreign exchange volatility; and

• poison pills.

Martine Turcotte, executive vice president and chief legal and regulatory officer for Bell Canada, says regulations around executive compensation will be hot issues this year. Turcotte’s comments were posted on Association of Corporate Counsel president Fred Krebs’ blog where ACC board members were looking to the year ahead.

“One of the major regulatory and investor areas of focus will be on executive compensation where more disclosure similar to a management and discussion analysis focused on compensation — that is now required,” she wrote on the blog. “While we had to go through this as one of the first Canadian issuers last year, regulators have kept a close eye on this, and now with ‘say on pay’ resolutions having been adopted by a few issuers like ourselves, it will be an interesting discussion with governance organizations and major investors.

“On the administration side, top focus will remain on outside counsel costs and the value proposal.”

Meanwhile, David Allgood, executive vice president and general counsel at the Royal Bank of Canada, commented on the blog: “We will have to respond to the impact of the global financial crisis on financial regulations and I see a significant regulatory onslaught occurring, particularly for financial institutions.

“I am expecting — looking for, actually — more use of project management principles by the outside law firms I work with to ensure greater efficiency and cost containment.”

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