Law Times

November 8, 2010

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A. NEUMAN ASSOCIATES INC. The Boutique Investigative, Forensic Accounting & Valuation Firm For Damage Quantifi cation, Fraud Detection, Business/Estate Disputes, Family Law, Personal Injury, Insurance Claims, Expert Testimony. Contact us by E-mail: andrew@IFAccountant.com Tel: (416) 223-5991 www.IFAccountant.com $4.00 • Vol. 21, No. 35 vorceMate_EAR_LT_June21_10.indd 1 6/18/10 10:23:20 AM Inside This Issue 3 Revising Retainers Covering Ontario's Legal Scene November 8, 2010 euman_LT_Sep13_10.indd 1 9/8/10 4:07:23 PM LSUC switches to online ballot But benchers fear lower turnout as paper booklets cut BY MICHAEL McKIERNAN Law Times elections online. As a result, the LSUC has largely ditched T 6 Victim Impacts 9 Focus On Family Law Quote of the week "The courthouse is not functional. It is totally clogged with people. We must unplug the system." — Barbara Landau, lawyer, psychologist, and mediator, See Family, page 11 its old paper booklets and will e-mail elec- tion materials to lawyers who will then vote for their choices using an online ballot. Bencher Heather Ross welcomed the move, saying the law society was "playing catch-up" in an increasingly electronic world. "Th at is where the world is and has been for some time," she told Convocation on Oct. 28. But the old bencher booklet and paper ballot haven't disappeared altogether. While former treasurer Derry Millar, who recom- mended the change, had wanted to limit the right to paper materials to the estimated seven per cent of lawyers without an e-mail address, a late amendment to the motion will allow those who want their materials and ballots in hard copy to request them. In Millar's view, the change would refl ect the shifting demographics of the bar in On- tario. "I think that in an electronic world, young people, and the vast majority of our members are younger people, do everything electronically," he said. "Th ey probably look at it more than if it was a book on the desk because they don't deal with material in written form." Millar noted the change would have a happy side-eff ect for the law society's coff ers. he Law Society of Upper Canada has taken a step into the 21st century af- ter voting to hold the 2011 bencher Former treasurer Derry Millar wanted to limit paper ballots to the estimated seven per cent of lawyers without an e-mail address. "Th e prime reason for distributing materials electronically, apart from the fact that we now live in an electronic world, is the cost." Th e last bencher election in 2007 cost the LSUC $275,000, with the vast majority of expenditures — $210,000 — consumed by printing and mailing costs for the booklet profi ling the candidates. Millar estimated the old process would cost $300,000 this time. Electronic voting has been cited as a potential solution to low turnout in mu- nicipal, provincial, and federal elections, a problem the law society also faces. Partici- pation in bencher elections has been on a steady downward trend since 1987, when it hit a high of 56 per cent. Even the con- tentious 1995 election, which followed the discovery of a huge defi cit in the liability insurance fund, attracted just 44 per cent of eligible voters. In 2007, that fi gure had sunk even further to less than 35 per cent. See Printing, page 5 ernance committee of the Ameri- can Bar Association, the senior partner at Davies Ward Phillips & Vineberg LLP took a tour of New York City to canvass her corporate contacts for their con- cerns about governance. Th ere was one issue that kept re- curring: the proxy voting system for shareholders. One person, in fact, told the Toronto-based lawyer she should be looking closer to home. "Th is person told me, 'Th e Canadian system is no better. We send our votes up there and there's no telling what will hap- pen to them,'" she says. Report finds major flaws in shareholder votes W BY MICHAEL McKIERNAN Law Times hen Carol Hansell became chairwoman of the corporate gov- Nearly two years later, Hansell, along with six of her colleagues at Davies, has released a new report on the quality of shareholder votes in Canada, a 200-page tome that delves into the relatively uncharted waters of problems with the sys- tem that aff ect the direction of the country's corporations. Th e paper highlights issues, such as over-voting, empty vot- ing, and a general lack of trans- parency, that blight company meetings across the country. According to Hansell, the TitlePlus_LT_Feb9/16_09 2/4/09 2:02 PM Page 1 complexity of the shareholder voting system means very few players understand how it works from start to fi nish. She hopes the paper will fi ll in the blanks by explaining it better so that all of those who work in it can get on with talking about how to fi x it. "Th is is a well-acknowledged issue that seems to be too big for people to get their heads around," Hansell says. "We think this is a re- ally good road map and it's intend- ed to help everybody get there." Sylvia Groves, a corporate gov- ernance consultant based in Cal- gary, says the people least likely to know about issues with shareholder voting are the ones with the most at stake. "People think they go in, like their local or federal election, they cast their vote, and the vote gets counted. But that's not the way it works. Th ey have no idea that their votes don't count." During her time at Nexen Inc., a major share issuer in Canada, shareholder votes could end up totalling as many as 20 million more than the number of shares issued, she notes. 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TitlePLUS policies issued with respect to properties in Québec and OwnerEXPRESS® policies do not include legal services coverage. 1 Th e investor-issuer relationship is fractured immediately in most cases by the fact that institutional and individual investors typically hold their shares through interme- diaries. Shareholders have to give their intermediaries instructions on how to vote at shareholder meet- ings, and their intentions are passed on to the issuer. Th e relationship becomes even further complicated by Canadian investors' right to hold "objecting benefi cial owner" status, which allows them to hold stock anonymously. Many investors use this provision to stop people from replicating their trading patterns, but the report suggests the time has come to reconsider it. In turn, intermediaries hire third parties to mail election materials and tabulate voting See Investors, page 5 LT Digital version.indd 1 6/25/10 12:59:47 PM Click here to subscribe today to LAW TIMES www.lawtimesnews.com

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