National securities act, majority voting top priorities for CCGG’s Erlichman

National securities act, majority voting top priorities for CCGG’s Erlichman
Stephen Erlichman will be focusing on a national securities regulator.
The new executive director of the Canadian Coalition for Good Governance knows he is taking on the role at a pivotal time in the history of the securities industry in Canada.
“It’s going to be busy, we have a busy agenda, no doubt,” says Stephen Erlichman, who became executive director of the CCGG Oct. 1.

During his term, the CCGG will pursue an agenda that includes promoting the implementation of a national securities act. The coalition, which is in favour of a national securities regulator, has already made its presentations at the Supreme Court of Canada. The decision is expected to be released in late fall.

“There’s a Supreme Court of Canada decision that will come out this year that will state whether or not it’s constitutional to have a national securities regulator,” says Erlichman. “Assuming the answer is ‘yes,’ there is already a transition office, which has been around for over a year now, and there is a draft of a national securities act. They are also working on regulations so this is going to occur if the Supreme Court of Canada says it’s a go. If not, it won’t go ahead unless the provinces agree.”

Erlichman has practised corporate and securities law for more than 30 years in Canada and the United States. He is currently a senior partner at Fasken Martineau DuMoulin LLP in Toronto and heads the firm’s investment products and wealth management group as well as its private equity group. Erlichman will continue as a senior partner at Fasken Martineau while assuming the responsibilities at the CCGG.

“The coalition has played a key role in working with institutional investors and public companies throughout the country and I look forward to assisting the coalition in continuing to be the driving force in fostering improved corporate governance in Canada,” says Erlichman.

Also on the CCGG agenda will be extending say on pay across a broader group of Canadian companies, and having all S&P/TSX index issuers implement majority voting and functioning shareholder democracy.

“The CCGG’s feeling is every company should have majority voting,” says Erlichman. “In addition to it being a CCGG view, it’s also my personal view.”

He points to some states in the U.S., such as Delaware, which has a provision for plurality voting as a backdrop, but if shareholders wish they can switch it with a shareholder vote to majority voting.

“We don’t even have that ability in Canada — we don’t have that ability in our corporate statutes to switch over to majority voting — it is plurality voting. So one thought is to have legislative amendments that would at least permit the switch over to majority voting even if it isn’t mandated as a requirement,” says Erlichman.

In addition to his law degree from the University of Toronto, Erlichman has an LLM from New York University and an MBA from Harvard University.

“We are very excited to have Steve lead the coalition into its next phase of development,” said Dan Chornous, CCGG chairman and chief investment officer of RBC Global Asset Management, in a statement. “He is one of Canada’s foremost authorities on governance issues and our members will benefit greatly from his deep knowledge and skill set.”

During his career, Erlichman has served as counsel to senior management, boards of directors and major shareholders of private and public companies, as well as investment dealers, commercial banks, insurance companies, private equity firms and managers of investment funds, pension funds, and hedge funds. He authored a major report for the Canadian Securities Administrators, which set out his recommendations to establish a fund governance regime for Canada, many of which have been enacted into law.

Erlichman replaces Stephen Griggs, who was appointed president and CEO of the OPSEU Pension Trust in April. During his three-year tenure, Griggs was instrumental in developing the coalition’s guidelines on board engagement, proxy circular disclosure, majority voting, and executive compensation.

The CCGG has 47 members that manage approximately $2 trillion of assets on behalf of Canadian investors.

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