Shareholder coalition worried about Yukon’s new corporate governance rules

A coalition of Canadian shareholders is raising concerns about recent changes made to Yukon's Business Corporations Act.

A coalition of Canadian shareholders is raising concerns about recent changes made to Yukon’s Business Corporations Act.

Stephen Erlichman, executive director of the Canadian Coalition for Good Governance, is worried some of the changes, which came into force in May, will diminish the accountability of directors to shareholders in public companies.

The coalition lobbies for “good governance practices” in publicly owned companies, according to its website.

The biggest issue Erlichman found with the new Yukon legislation is an amendment that allows a company’s directors to consolidate proxy votes. “We made it clear we thought it was very wrong,” said Erlichman.

“Directors are fiduciaries, elected by shareholders, they shouldn’t be transferring their right to another director.”

With modern technologies, it’s hard to justify not being able to join a director’s meeting by phone, he said.

He points out this is a departure from other jurisdictions’ regulations.

“A director must give thought to whatever the issue is,” he added.

Yukon corporations can also now register as a director of another company, whereas before all directors had to be actual people.

The change will make it harder to ensure individual liability, Erlichman said. “We want humans who will have legal liability.”

However, even if a corporation becomes the director of another one, the first company will still be required to have directors, human ones, and they will be liable for the choice they make, said Whitehorse lawyer Lorne Austring.

“There is a system set up in the legislation,” he said.

Erlichman isn’t convinced. He notes that the legislation describes the directors and the corporations as “jointly and severally liable” for their obligations. That could result with only the company being on the hook, giving the directors a free pass, he said.

The new measures granted by the legislation are only available to companies with suitable bylaws – meaning that shareholders would have to approve it in the first place.

“There is an opportunity for the shareholder to restrict changes directors can make to bylaws,” said Fred Pretorius, director of corporate affairs for the Yukon government.

The changes, he said, offer those possibilities but have to be first implemented by the corporation.

Erlichman is worried some companies may flock to be registered in the territory to take advantage of these new provisions.

“We at the coalition would be very upset if existing public companies tried to continue into the Yukon to take advantage of these Yukon provisions which we believe are not in the best interest of shareholders,” he said.

Yukon’s mining companies are commonly registered in British Columbia, and the territory’s lawyers have observed a steady decline in locally registered firms.

Pretorius said the act’s update was much needed. “It is essentially 1980s legislation with changes in 2002,” he said.

“We did that to foster business activity in the Yukon.”

The amendments were drafted after extensive consultation with businesses, he added.

“We believe we’ve adequately balanced the director’s rights and the shareholder’s right,” Pretorius said.

Since the act only recently came into force, it’s hard to tell what the effects will be, Austring said.

He said one thing is clear, though: the legislation needed to catch up to other jurisdictions.

“Ten years ago we had tons of public companies, but the legislation didn’t catch up,” which resulted in the decline, said Austring,

“You can’t sit on your 10-year-old smartphone.”

Contact Pierre Chauvin at

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Premier Sandy Silver, left, and Yukon’s Chief Medical Officer of Health Dr. Brendan Hanley speak at a COVID-19 update press conference in Whitehorse on Nov. 19. On Nov. 24, Silver and Hanley announced masks will be mandatory in public places as of Dec. 1, and encouraged Yukoners to begin wearing masks immediately. (Crystal Schick/Yukon News file)
Masks mandatory in public places starting on Dec. 1

“The safe six has just got a plus one,” Silver said.

Dr. Brendan Hanley, Yukon’s chief medical officer of health, speaks at a press conference in Whitehorse on March 30. Hanley announced three more COVID-19 cases in a release on Nov. 21. (Crystal Schick/Yukon News file)
Three more COVID-19 cases, new exposure notice announced

The Yukon’s Chief Medical Officer of Health, Dr. Brendan Hanley, announced three… Continue reading

Yukonomist Keith Halliday
Yukonomist: COVID-19 strikes another blow at high-school students

They don’t show up very often in COVID-19 case statistics, but they… Continue reading

The Cornerstone housing project under construction at the end of Main Street in Whitehorse on Nov. 19. Community Services Minister John Streicker said he will consult with the Yukon Contractors Association after concerns were raised in the legislature about COVID-19 isolation procedures for Outside workers at the site. (Crystal Schick/Yukon News)
Concerns raised about alternate self-isolation plans for construction

Minister Streicker said going forward, official safety plans should be shared across a worksite

Beatrice Lorne was always remembered by gold rush veterans as the ‘Klondike Nightingale’. (Yukon Archives/Maggies Museum Collection)
History Hunter: Beatrice Lorne — The ‘Klondike Nightingale’

In June of 1929, 11 years after the end of the First… Continue reading

Samson Hartland is the executive director of the Yukon Chamber of Mines. The Yukon Chamber of Mines elected a new board of directors during its annual general meeting held virtually on Nov. 17. (Joel Krahn/Yukon News file)
Yukon Chamber of Mines elects new board

The Yukon Chamber of Mines elected a new board of directors during… Continue reading

The Yukon Hospital Corporation has released its annual report for 2019-20, and — unsurprisingly — hospital visitations were down. (Crystal Schick/Yukon News file)
Annual report says COVID-19 had a large impact visitation numbers at Whitehorse General

The Yukon Hospital Corporation has released its annual report for 2019-20, and… Continue reading

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

City council was closed to public on March 23 due to gathering rules brought on by the COVID-19 pandemic. The council is now hoping there will be ways to improve access for residents to directly address council, even if it’s a virtual connection. (Crystal Schick/Yukon News file)
Solution sought to allow for more public presentations with council

Teleconference or video may provide opportunities, Roddick says

Megan Waterman, director of the Lastraw Ranch, is using remediated placer mine land in the Dawson area to raise local meat in a new initiative undertaken with the Yukon government’s agriculture branch. (Submitted)
Dawson-area farm using placer miner partnership to raise pigs on leased land

“Who in their right mind is going to do agriculture at a mining claim? But this made sense.”

Riverdale residents can learn more details of the City of Whitehorse’s plan to FireSmart a total of 24 hectares in the area of Chadburn Lake Road and south of the Hidden Lakes trail at a meeting on Nov. 26. (Ian Stewart/Yukon News file)
Meeting will focus on FireSmart plans

Riverdale residents will learn more details of the City of Whitehorse’s FireSmarting… Continue reading

The City of Whitehorse is planning to borrow $10 million to help pay for the construction of the operations building (pictured), a move that has one concillor questioning why they don’t just use reserve funds. (Crystal Schick/Yukon News)
Councillor questions borrowing plan

City of Whitehorse would borrow $10 million for operations building

Most Read