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

? ? ? ? ?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) Kingsdale Advisors' 2024 Canadian proxy season review (including director refreshment and say-on-pay trends): Kingsdale Advisors released last week its "2024 Canada Proxy Season Review: Boards Under Fire." Below is from the report's introductory message by Kingsdale Chairman and CEO, Wes Hall,?with a general overview of the report:

? ? ? ? ? ? ? ? ? "The 2024 proxy season has been one of intense scrutiny and shifting power dynamics. This year, boards have faced unprecedented challenges, with three key themes emerging: CEO Succession, Director Refreshment, and Executive Compensation. These areas have become critical points of contention, as shareholders demonstrate their increasing influence by holding boards accountable for their processes and decisions.?

? ? ? ? ? ? ? ? ? ? "While shareholders cannot directly select a CEO, they are making it clear that the board’s approach to succession planning is non-negotiable.?The rapidly changing governance landscape, especially regarding director tenure, independence, and diversity, places additional pressure on boards. Proxy advisors and institutional shareholders are now laser-focused on these issues, making them a focal point for activists seeking to reshape corporate governance.

? ? ? ? ? ? ? ? ? ?"This year has shattered last-year’s record with 76 activist campaigns launched across 55 Canadian companies?spanning 11 major sectors. This surge reflects the broader economic climate, where institutional shareholders have a zero-tolerance approach to underperformance and are willing to engage publicly to drive meaningful change.

? ? ? ? ? ? ? ? ? "In the 2024 proxy season, many of Canada’s largest companies were misaligned with shareholders, ISS, and best governance practices over their annual shareholder meeting formats. Only 20% of S&P/TSX Composite Index companies adopted hybrid meetings?– now seen as the gold standard for shareholder engagement.?Instead, 55% kept to?virtual-only?formats, and 25% opted for in-person-only,?highlighting a growing disconnect with shareholder expectations.

? ? ? ? ? ? ? ? ? "AI governance is an emerging topic in the U.S. 2024 proxy season and is set to make its way to Canada.?Although no shareholder proposals demanding transparency on AI practices have passed yet, the rise in such proposals signals growing investor concern over the ethical use of AI. Boards must stay ahead of these concerns by implementing robust AI governance strategies........"

? ? ? ? ? ? ? ? ? Below is from the section of the report, "Director Refreshment" (at p.16):

? ? ? ? ? ? ? ? ? ".....Director tenure is among the factors where institutional investors’ policies override those of proxy advisors. Institutional investors are more likely to impose a discretionary cut off and vote accordingly. Canadian companies take note - this year, the average tenure of S&P/TSX60 Index directors is seven years, but 9% of directors have a tenure of 15 years or greater. Seven S&P/TSX60 Index companies have an average tenure over 10 years, a vulnerability ripe for activist exploitation.

? ? ? ? ? ? ? ? ? "While term limits are an effective way to ensure director refreshment, only 43% of S&P/TSX60 Index companies had them in place this year. Fewer still, just 13 of the S&P/TSX60 Index, have a retirement age policy for directors?as well. These important levers to protect companies and boards remain under-utilised in Canada...."

? ? ? ? ? ? ? ? ? Below is from the section of the report, "Say-on-Pay Trends in Canada" (at p.11):

? ? ? ? ? ? ? ? ? "In 2024, average shareholder support for Say-on-Pay (SoP) resolutions rose to 92.4%, with approximately 80% of Canadian companies receiving over 90% support for their SoP proposals. However,?4 companies failed to secure shareholder backing?for their SoP resolutions, three of which had also failed in 2023. Glass, Lewis & Co. LLC (GL) opposed 23 resolutions, while Institutional Shareholder Services Inc. (ISS) opposed 7, marking GL's return to its historical trend of issuing around three times as many negative recommendations as ISS (compared to five times as many in 2023)."

? ? ? ? ? ? ? (ii) Disney updates CEO succession planning process and appoints new chair/press release of the day: On Aug.21/24, The?Walt Disney Company announced in this press release?that it had formed "a special Succession Planning Committee to advise the Board and plan for a transition of leadership", to be chaired by one of its board members, James Gorman (former CEO and presently Executive Chairman at Morgan Stanley who oversaw the recent succession process at that bank). Yesterday, Disney?announced in this press release?that its?board had named James Gorman as new Chairman of the Board, and provided an update on its CEO succession planning process,?as follows:

? ? ? ? ? ? ? ? ? "The Walt Disney Company Board of Directors has named James P. Gorman as Chairman of the Board,?effective January 2, 2025. He will succeed Mark G. Parker, who is departing the Disney Board on January 2 after nine years of service. Gorman is Executive Chairman of Morgan Stanley?and, as previously announced, will be stepping down from that role on December 31, 2024. He is currently Chair of the Disney Board’s Succession Planning Committee,?which is working to identify and prepare the next chief executive officer of The Walt Disney Company......

? ? ? ? ? ? ? ? ? "A critical priority before us is to appoint a new CEO, which we now expect to announce in early 2026. This timing reflects the progress the Succession Planning Committee and the Board are making, and will allow ample time for a successful transition before the conclusion of Bob Iger’s contract in December 2026,” Gorman said.

? ? ? ? ? ? ? ? ?"About the Succession Planning Committee: The Board’s Succession Planning Committee is chaired by Gorman and includes directors Mary T. Barra and Calvin R. McDonald, as well as Parker until his departure. The Committee and the full Board continue to undertake a deliberate and thoughtful succession planning process, including evaluation of transition structures and organizational frameworks, and planning for potential impacts of succession decisions across the Company. The Committee met six times in fiscal 2024,?consistently engaging with the full Board on the substance of the decisions to be made. The Board discussed succession planning at each of its regularly scheduled meetings in fiscal 2024. The Committee and Board continue to review internal candidates and external candidates....."

? ? ? ? ? ? ? (iii) (other) press releases of the day:?

? ? ? ? ? ? ? ? ? ? (a) On July17/24, HSBC Holdings plc announced in this press release?the promotion of its CFO to the position of CEO, and on July 31, HSBC Holdings announced in this Current Report?of a foreign private issuer filed with the SEC the appointment of an interim CFO (see item (viii)(j) from Aug.26/24). Today,?HSBC Holdings announced in this press release?the promotion of the Group Chief Risk and Compliance Officer to the position of CFO, with the interim CFO ?resume his role of Global Financial Controller,?as follows:

? ? ? ? ? ? ? ? ? ? ? ? "HSBC Holdings plc announces the appointment of Pam Kaur as Group Chief Financial Officer (GCFO) and an Executive Director of the Board of Directors?effective 1 January 2025.?Pam, who joined the Group in April 2013 as Group Head of Audit, is currently Group Chief Risk and Compliance Officer (GCRCO). She is a highly experienced financial services executive with almost 40 years' experience having worked in the UK and the US for British, American and German Banks.?

? ? ? ? ? ? ? ? ? ? ? ? ?"A qualified chartered accountant, Pam has strong technical knowledge and experience in treasury, capital, balance sheet and risk management. She has served on the Group Executive Committee for over a decade and brings a global perspective and an appreciation of the strategic challenges and opportunities, locally and globally, facing the banking industry in general and HSBC in particular. Jon Bingham, interim GCFO, will resume his role of Global Financial Controller.....HSBC Group Chief Executive, Georges Elhedery, said:?"We had a strong bench of internal and external candidates to choose from and Pam was the exceptional candidate to recommend to the Board....." We will update on Mrs Kaur's successor as Group Chief Risk and Compliance Officer in due course";

? ? ? ? ? ? ? ? ? (b) TSX-listed METRO Inc.?announced yesterday in this press release?that its?CFO would retire next Spring, as follows:

? ? ? ? ? ? ? ? ? ? ? ?"METRO Inc. announced today that after more than 12 years with the company, Fran?ois Thibault, Executive Vice President, Chief Financial Officer and Treasurer, has decided to retire next spring. Since joining METRO in 2012, Fran?ois has been a great leader of the company and business partner to our operating divisions, steering a number of key acquisitions, including the Jean Coutu Group......Fran?ois will continue in his role until his retirement which will give the Company time to identify a successor through the external search we are initiating as well as allow for a smooth and harmonious transition."

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