The Canadian Securities Administrators recently suggested changing the way in which corporations are governed. The group, comprised of provincial and territorial securities regulars, proposed moving from a system of rules to one governed by principles, but withdrew the idea after it received criticism. This was the right decision, according to a poll of Canadian CEOs conducted by COMPAS Inc.
Roughly two-thirds of the respondents argued Canada should not move to a system based on principles, and even more said that principles can be vague and difficult to enforce.
The CEOs also weighed on the issue of a national securities regulator, which has met with opposition from provinces such as Quebec and Alberta. An overwhelming majority (86%) said the federal government should go ahead with a national regulator if deemed constitutional by the courts, even if some provinces object.
“Having one body instead of the multiple bodies we have now will create a more respected view of oversight,” wrote one respondent, adding it would also “eliminate the need by organizations to comply with the multitude of varying regulations.”
For a province to opt out of a national regulator would have negative implications for businesses, the panelists believe. Approximately two-thirds said any province that refused to participate in a countrywide organization would end up with less money invested in its corporations than if it went along with a national plan.
Despite the desire for a national regulator, the panelists believe our hodgepodge of oversight bodies have actually performed better than the Securities and Exchange Commission in the U.S. The CEOs awarded the latter organization a score of 45 out of 100, while Canada’s regulatory bodies received a score of 57.
“These agencies are only as good as the people they have working for them,” one respondent pointed out. “None of them have been shining lights in the last few years.”