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Grant Sawiak is a partner at Fogler Rubinoff and a former staffer at the TSX who recently successfully advised a group of dissidents at Continental Precious Minerals Inc., a small mining company with an operation in Sweden.
Sawiak’s involvement in Continental’s proxy battle – which now has a new team of directors that doesn’t include the chief executive – gave him a first-hand look at corporate governance in the junior mining sector, a sector that’s home to thousands of companies which, in market cap terms, is typical of much of corporate Canada.
But despite that victory, Sawiak, who was personally sued during the battle, was not impressed with how corporate governance played out at Continental, a company where shareholders have had no say in the election of directors for about 15 years because of a by-law that requires half the outstanding shares to be present at a shareholder meeting.
In his view, corporate governance, which he defines as “the assortment of law, policies, suggestions and practices that directors of public companies are supposed to follow in order for them to act in the best interests of all stakeholders,” is, in practice, only available to those who can afford it.
“For the most part, Canada has theoretical rather than functional or executable corporate governance,” he said, arguing it’s alive and well at the large-cap companies (which are held accountable by well-funded critics and stakeholders) but not so elsewhere where at the first problem a stakeholder sells the securities and moves on.
Given his experience, Sawiak believes corporate governance should be better across the spectrum. If there’s not going to be equal access without the same level of funding, two factors — information and self-help — are required. “If a stakeholder can’t be empowered through funding, they can be empowered through information,” states Sawiak, who argues that much of the information is already published – but in different formats.
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