'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

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? ? ? ?Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)?

? ? ? ? ? ? ? (i) ISS report on top governance issues in Canada in 2024: Last week, ISS released this report, "Top Governance & Stewardship Issues in 2024", which, in addition to covering governance issues in the U.S. (and elsewhere), discusses specific governance issues in Canada?(For its discussion of virtual AGMs in Canada, see item (i)(c) from last Thursday). Below are excerpts:

? ? ? ? ? ? ? "Executive Compensation--Canada: Median CEO pay at S&P/TSX Composite Index companies declined slightly on a year-over-year basis in 2023,?driven primarily by a reduction in median annual bonus and option grants, offset by an increase in median base salary. The decline in median option grant value stems from the fact that only 49 percent of CEOs at S&P/TSX Composite Index companies received option grants during the reporting year. The number and size of outsized equity grants to CEOs declined from the levels reported in 2022. The number of say-on-pay resolutions on ballot also declined slightly, and there were four failed say-on-pay votes in 2023,?the same number as in 2022. In total, 23 companies received less than 80 percent say-on-pay vote support,?up from 20 in 2022. Companies with low vote support will be expected to include robust responses in their 2024 proxy statements.....

? ? ? ? ? ? ? "Diversity, Equity & Inclusion--Canada: In October 2023, the Canadian Securities Administrators (CSA) announced publication of their 9th annual review and report on the representation of women on boards and in executive officer roles. Based on the disclosures of 602 non-venture reporting issuers in the participating regulatory jurisdictions, the key findings indicate that since the prior year there had been a 3 percent increase in the number of board seats filled by women;?the number of board vacancies filled by women decreased 2 percent; the number of issuers having at least one woman on the board increased 2 percent; and, the number of issuers having at least three women on the board increased 6 percent to 36 percent of issuers included in the review. Eight percent of issuers had a female board chair.......

? ? ? ? ? ? ? ?"Global Environmental & Social Issues—Canada: As in previous years,?for 2024, several shareholder proposals will be submitted by ME?DAC, primarily at Canada's banks. The new shareholder proposal topics are related to:?(1) in-person annual meetings; (2) linking part of incentive compensation to all employees to ESG objectives; (3) disclosure of languages mastered by officers and directors; (4) societal dividend and sharing of value; (5) certification of ESG reports; and, (6) public disclosure of non-confidential information, country-by-country reporting, compensation ratios and tax havens. Repeat shareholder proposals will include those related to say-on-climate, auditors, and a circular economy. Some of ME?DAC's proposals were voted on at the AGMs of Metro?(January 30, 2024) and?CGI (January 31, 2024). So far, other submissions have come from The Accountability Board (TAB), which submitted a shareholder proposals related to cage-free eggs and one related to equity, diversity and inclusion goals (which was later withdrawn) at Metro; from the BC General Employees' Union (BCGEU), which submitted a shareholder proposal requesting that the board report to shareholders on how it oversees risks and compliance related to anticompetitive practices (Metro); and from the Shareholder Association for Research & Education (SHARE), on behalf of the United Church of Canada, requesting that Metro report to shareholders on its management of climate-related risks (which was also withdrawn).......

? ? ? ? ? ? ? ? "Activism and M&A—Canada: There was an increase in the number of proxy contests at Canadian companies in 2023, with seven contests that saw a shareholder vote compared to four in 2022. The targeted companies had a median market capitalization of $48 million,?a significant rise from the $4.3 million seen in the previous year. Although junior natural resource companies continued to be prominent spaces for activism, there was also representation from the technology and healthcare sectors. Compared to 2022, proxy contests at natural resource companies involved firms with generally more progressed exploration and development assets, with some even having producing interests. As 2023 ended, Gildan Activewear Inc.?became embroiled in a proxy fight stemming from the termination of its co-founder and CEO, Glenn Chamandy......The proxy fight at Gildan is noteworthy in the Canadian market context, as battles involving S&P/TSX Composite Index constituents are infrequent, with the most recent one reaching a shareholder vote at Detour Gold Corp.?in 2018......"

? ? ? ? ? ? ? (ii) update on the upcoming mandatory climate/sustainability disclosure?requirements in Canada: CSSB issues proposed set of sustainability disclosures for public consultation; the Canadian securities regulators issues ?related statement/FT overview of new climate-risk disclosure rules for multinational companies:

? ? ? ? ? ? ? ? ?(a) To recap the status of mandatory climate/sustainability disclosure requirements in Canada: On July 5/23, the?Canadian securities regulators issued this statement?inter alia stating that "staff intend to conduct further consultations to adopt disclosure standards based on ISSB Standards, with modifications considered necessary and appropriate in the Canadian context", while in?June/22,?the Canadian Sustainability Standards Board (CSSB) was formally launched to "work with the International Sustainability Standards Board (ISSB) to support the uptake of ISSB standards in Canada, highlight key issues for the Canadian context, and facilitate interoperability between ISSB standards and any forthcoming CSSB standards." On Feb. 6, the CSSB?announced in this news release?that it would be releasing next month "key documents for public comment that will shape Canada's first sustainability standards" (see item (i) from Feb. 12/24). And yesterday, as reported in this Globe and Mail article this morning, "[https://Canada sustainability standard-setters embrace strong international reporting rules]Canada sustainability standard-setters embrace strong international reporting rules", CSSB announced in this news releasethe publication of its proposed "Canadian Sustainability Disclosure Standards" for public consultation (comment period to extend until June 10/24), as foo\llows:?

? ? ? ? ? ? ? ? ? ? ?"The Canadian Sustainability Standards Board (CSSB) is proud to announce the release of its first proposed Canadian Sustainability Disclosure Standards (CSDS), marking a significant milestone in advancing sustainability reporting in Canada. The proposed standards aim to set a new benchmark for the disclosure of sustainability-related information, facilitating a more consistent and comparable approach....

? ? ? ? ? ? ? ? ? ? ? "The International Sustainability Standards Board (ISSB) issued its first standards in June 2023 – IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information?and IFRS S2, Climate-related Disclosures.?Committed to the global baseline the ISSB established, the CSSB’s proposed CSDS 1 and CSDS 2 align with IFRS S1 and S2 – but with Canadian-specific modifications suggested. Also available for public comment is a paper discussing how the CSSB proposes to introduce changes, if required, to IFRS Sustainability Disclosure Standards for use in Canada. Proposed modifications to CSDS 1 and CSDS 2 include Canadian-specific effective dates and transition relief proposals to help with eventual implementation of the standards....."

? ? ? ? ? ? ? ? ? ? ? ? ? Below is from the statement of the Canadian securities regulators (CSA) on the proposed CSSB sustainability disclosure standards:

? ? ? ? ? ? ? ? ? ? ? ? ? "The Canadian Securities Administrators (CSA) today welcome the launch of the Canadian Sustainability Standards Board’s (CSSB) consultation on?the Canadian Sustainability Disclosure Standards 1 and 2......In order to become mandatory under Canadian securities legislation, the CSSB standards must first be incorporated into a CSA rule. Once the CSSB consultation is complete and its standards are finalized, the CSA anticipates seeking comment on a revised rule setting out climate-related disclosure requirements.?The CSA proposal will consider the final CSSB standards and may include modifications appropriate for the Canadian capital markets. The CSA anticipates adopting only those provisions of the sustainability standards that are necessary to support climate-related disclosures.

? ? ? ? ? ? ? ? ? ? ? ? ? ?"The CSA continues to monitor and assess international developments in this area, including the United States Securities and Exchange Commission (SEC)’s climate-related disclosures rule approved on March 6, 2024.?As noted in previous market updates, the CSA remains committed to working towards disclosure requirements that support the assessment of material climate-related risks, reduce market fragmentation, and contribute to efficient capital markets while considering the needs and capabilities of issuers of different sizes....."

? ? ? ? ? ? ? ? ? ? ? ? Below is from the Globe and Mail report:

? ? ? ? ? ? ? ? ? ? ? ? "The group charged with developing Canada’s rules for how companies will disclose sustainability risks said Wednesday it has fully embraced new international standards – in contrast with the United States, where the national securities regulator scaled back its proposals in the face of opposition earlier this month.....

? ? ? ? ? ? ? ? ? ? ? ? ? "The CSSB had the option of scaling back the international rules, but did not, said chair Charles-Antoine St-Jean.?“We do take into account to see what the various regulators, including and especially our American friends, come up with, but we do have the flexibility to issue the standards that we feel are in the best public interest for Canada,” he said. “Our position that was very clear, unanimous from the board, was that we should be disclosing Scope 3.”......

? ? ? ? ? ? ? ? ? ? ? ? ? ?"In addition to the CSA’s response, the Office of the Superintendent of Financial Institutions?will make the determination on how the standards will apply to federally regulated financial institutions and pension plans....."OSFI will monitor the CSSB consultation closely and has every intention to update Guideline B-15 to align with the CSSB standards once finalized,” OSFI spokesperson Shane Diaczuk said in an e-mail Wednesday evening. CSSB consulted CSA and OSFI along the way, Mr. St-Jean said. “We?do have regular discussions on the development of our standard. But you know, they will do what they must do once we’ve?issued our standards.”

? ? ? ? ? ? ? ? ? ?(b) Useful overview of the new climate-risk disclosure rules that will apply to multinational companies in this FT article yesterday,?"Bar is rising for companies’ disclosure of climate risk information." Below are excerpts:

? ? ? ? ? ? ? ? ? ?"Thousands of international companies will still face pressure to meet the higher bar for climate risk information set by Europe, despite the wider gap in global standards created by the new lighter rules of the US Securities and Exchange Commission. “American corporations that want to operate in Europe are going to have to abide by regulations around disclosure and reporting that they have been fiercely lobbying against in the US,” said Mark Campanale, founder of the Carbon Tracker think-tank. These companies will have to decide whether trading in the EU is worth the extra regulatory burden, he said....

? ? ? ? ? ? ? ? ? ? ? "Under the most far-reaching climate data rules in the world, from next year the EU will expect large and listed companies to publish their carbon footprint from direct operations and energy usage, as well as their contribution to both suppliers’ and customers’ emissions, under the corporate sustainability reporting directive (CSRD).....At least 10,300 companies outside the EU will eventually be caught by these rules, including more than 3,000 American companies, according to analysis by Refinitiv, part of the London Stock Exchange Group.

? ? ? ? ? ? ? ? ? ? ? ? "It is not only the EU rules that could catch multinationals. US companies such as Chevron?and Amazon?will also fall under rules imposed by California,?which are less extensive than the EU but do require carbon footprint disclosures.? Beyond those jurisdictions are more than a dozen other countries, including the UK, Japan, New Zealand, Hong Kong and Singapore, which have all indicated that they plan to align with a set of extensive disclosure requirements released by the most prominent voluntary initiatives. These include the International Sustainability Standards Board and its precursor, the Task Force on Climate-related Financial Disclosures.?

? ? ? ? ? ? ? ? ? ? ? ?"The ISSB operates under the International Finance Reporting Standards Foundation, responsible for globally-accepted accounting standards. “The SEC] just ignored the need to harmonise globally and?.?.?.?that’s a nightmare for issuers,” said Allison Herren Lee, a....former?SEC commissioner......."

? ? ? ? ? ? ? ? ? ? ?Note the "cheat sheet" at the end of the article listing the climate-risk disclosure rules that will apply in various jurisdictions, in what year they kick in and to what companies.

? ? ? ? ? ? ? ?(iii) employee reps on the Starbucks board?:?a follow-up on the unique activist campaign for board seats launched by a coalition of trade unions that 'got the attention of Wall Street': ?This interesting featuring length FT article appeared in January, "How unions are fighting a boardroom battle at Starbucks", on?the unusual proxy fight launched by a coalition of trade unions (the Strategic Organizing Center, 'SOC') to put three employee representatives on the Starbucks?board,?this proxy campaign described by an "adviser to large public companies as......the campaign we have been waiting for and worried about": see item (iii) from Jan. 31/24. As?discussed in this CNBC piece last week, "Labor unions end proxy fight at Starbucks after bargaining progress", the SOC announced in this press release?last Tuesday that, inter alia, it was withdrawing its director nominees for election at Starbucks' 2024 AGM (held yesterday). Below is from the CNBC?article:

? ? ? ? ? ? ? ? "A group of labor unions said on Tuesday it was ending its proxy fight at Starbucks after the two sides agreed last week to work toward a “foundational framework” on collective bargaining. “We feel that now is the time to acknowledge the progress that has been made and to allow the Company and its workers to focus on moving forward,” the Strategic Organizing Center?said in a release.

? ? ? ? ? ? ? "The SOC said it is withdrawing the three nominees it had put forth for election to Starbucks’ board.?A Starbucks spokesperson said that the company appreciated the SOC’s decision and said the board remained focused on “driving long-term value for all stakeholders, including partners, shareholders, customers, and farmers.” The cessation comes after two influential proxy advisors, Institutional Shareholder Services and Glass Lewis, both recommended that shareholders vote for management board nominees.....

? ? ? ? ? ? ??"It was the first time that a labor union — typically opposed to activist campaigns— had drawn on the activist toolkit.?The SOC hired well-respected communications, legal and proxy advisors?who have worked on behalf of major activists and hedge funds. Together, they built a thesis that drew a line from slipshod bargaining tactics to weakened shareholder returns.

? ? ? ? ? ? ? "We think it’s imperative that shareholders continue to monitor the Board’s performance and Starbucks’ approach to labor relations issues in the coming months – and we plan to continue to hold the Company accountable going forward,” the labor group said in a statement.?Starbucks’ annual shareholder meeting is scheduled for March 13.?“We look forward to continuing to work alongside our partners as we fulfil our mission together,” the Starbucks spokesperson said."

? ? ? ? ? ? ? (iv) press releases of the day:?

? ? ? ? ? ? ? ? ? ?(a) NYSE-listed, sportswear company Under Armour, Inc.?announced yesterday in this press release a CEO transition, with the founder, former CEO and current Executive Chairman replacing the current CEO, as follows:

? ? ? ? ? ? ? ? ? ? ? ? "Under Armour, Inc. today announced that Kevin Plank?will become President & Chief Executive Officer, effective?April 1, 2024. Plank will succeed?Stephanie Linnartz, who will be stepping down as President & Chief Executive Officer?and member of the Board. In connection with Plank's appointment, Dr.?Mohamed A. El-Erian, an independent director since 2018 and Lead Director since 2020, will become the non-executive Chair of the Board.?

? ? ? ? ? ? ? ? ? ? ? ? ?"Plank, who will transition from Executive Chair of the Board, will remain a director. Linnartz will remain an advisor to the company through?April 30, 2024.....Plank founded Under Armour in 1996.....From 1996 to 2019, he served as Under Armour's Chief Executive Officer and Chair of the Board of Directors. In?January 2020, Plank was appointed Executive Chair and Brand Chief......";

? ? ? ? ? ? ? ? ? (b) NYSE/TSX-listed Restaurant Brands International Inc. (RBI) announced today in this press release?"leadership changes", including the appointment of a new CFO,?as follows:

? ? ? ? ? ? ? ? ? ? ? ? "Josh Kobza, Chief Executive Officer of Restaurant Brands International Inc. today announced leadership team changes to support the Company's long-term growth outlook......Sami Siddiqui?has been appointed Chief Financial Officer, succeeding?Matt Dunnigan?who is leaving the company.?Jeff Klein?has been appointed as President of Popeyes US and?Canada, succeeding Mr. Siddiqui who has led the brand for nearly four years.?Thiago Santelmo?has been appointed President of International. Mr. Santelmo succeeds?David Shear, who will remain with the Company for a year as an advisor and assist in the transition. Today's leadership changes are effective immediately and a new President of EMEA and Chief Marketing Officer for Popeyes will be named at a later date.....Mr. Siddiqui has been at RBI for eleven years, including eight years as brand President for Popeyes in?Miami, all of our brands in the?Asia Pacific?region and?Tim Hortons?in?Toronto......

? ? ? ? ? ? ? ? ? ? ? Compensation arrangements for the new CFO are disclosed in the related Current Report?filed with the SEC.

? ? ? ? ? ? ? ? ? ?(c) Société Générale?announced last week in this press release?the appointment of a Group Deputy Chief Risk Officer, as follows:

? ? ? ? ? ? ? ? ? ? ? ? ?"Societe Generale announces the appointment of Ludivine Labarre as Group Deputy Chief Risk Officer, effective as of 1 March 2024. Ludivine Labarre reports to Stéphane Landon, Group Chief Risk Officer, and joins the Societe Generale Management Committee.

? ? ? ? ? ? ? ? ? ? ? ? "Her in-depth knowledge of the Group as well as her financing and risk management expertise will be key assets in further contributing to the development of Societe Generale’s activities while maintaining a risk profile and operational excellence that meet the highest industry standards....Ludivine Labarre joined Societe Generale in 2005...."

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