Shareholder Democracy in Canada
The federal government stands poised to exercise its constitutional right to regulate financial markets, an area traditionally left to competing provincial securities commissions. The current state of securities regulation renders impotent US-style takeover defences, such as poison pills and staggered boards, but allows voting caps and pyramiding in their stead. Various federal securities regulation models are weighted in light of the current state of their needed complementary institutions. One option, for which Canada is relatively well prepared, is the British model of activist independent institutional investors and mandatory takeover bids.
Partial financial assistance from the SSHRC and the Poole Endowment at the University of Alberta is gratefully acknowledged. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.