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  • time out period; partners who provide more than 10 hours of audit services to the client and lead partners on significant subsidiaries rotate after 7 years with a 2 year time out period)
  • Prohibits members of engagement team from working for the client in a senior accounting capacity until one year has passed from the time when they were on the engagement team
  • Prohibits compensation of audit partners for cross-selling non-audit services to their audit clients
  • Requires audit committee prior approval for any service provided by the auditor
  • The rules for listed entities apply only to those listed entities with market capitalization or total assets in excess of $10 million.
Shedding Light on Proxy Voting Records
On November 13, 2003, the Shareholder Association for Research & Education (SHARE) released the results of their third annual Key Proxy Vote Survey. According to the Office of the Superintendent of Financial Institutions, trustees have an obligation to ensure that proxies are voted in a prudent and responsible manner. General survey findings show that the majority of pension funds and other institutional investors delegate responsibility for voting their proxies to their investment manager. To this end, investment managers exercise material economic power and have some influence over plan members’ retirement security. Consequently, SHARE recommends that pension trustees pay attention to and review how investment managers vote proxies in the course of their selection and review of investment managers. Given the above, SHARE argues that the proxy voting actions and decisions of investment managers should be transparent and accountable.

The survey is a study of the proxy voting practices of Canadian pension investment management firms and proxy voting services. It polled 91 investment management firms and four proxy-voting services on how they answered proxy issues arising from 27 proposals

over the course of the 2003 proxy season. Ten firms refused to participate in the study in 2003, down from twelve in 2002 while 47 simply did not respond (46 in 2002).
The 12 management and 15 shareholder proposals were selected based on a “long-term, worker-owner view of shareholder value that emphasis management accountability, good corporate governance, compliance with international labour standards and corporate social responsibility”. The 2003 survey included more management resolutions that historically have been labeled ‘routine’, including five resolutions to elect directors (two were single slate resolutions and three targeted individual nominees) and two auditor reappointments.
Copies of the survey are available by contacting SHARE.
Aiding Kenya Via Education and Infrastructure Support
There is an old adage ‘Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime.’ Last month the Canadian International Development Agency (CIDA) announced Canada’s support of education and governance initiatives in Kenya.

The financial aid package includes $1 million to be put towards improving corporate governance in Kenya. The country’s Centre of Corporate Governance will use the money to:

  • provide training programs for company directors and officers as well as government and regulatory authorities;
  • develop and distribute instructional materials; and
  • coordinate and implement pan-African corporate governance programs, networks and activities; and
  • promote corporate governance standards in Africa.
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