Issuers must lead the way to better corporate governance

Pointing to the recent work of the Securities and Exchange Commission on selective disclosure and the OSC and Toronto Stock Exchange in the RT Capital case, Stromberg encourages issuers to take a bottom up approach to evaluating the quality of their disclosure in an effort to seek optimal disclosure practices. “For many issuers, this may well involve a huge attitudinal change and a coming to terms with the fact that the way they have always done things is no longer acceptable (if it ever was) for a variety of reasons that in some cases may go beyond issues of simple compliance with legal requirements.”

Stromberg says that if issuers follow “the core principles of fairness and integrity and information and knowledge” they should be able to devise governance procedures that will allow them to stay ahead of mere regulatory pressure to behave a certain way. “It’s important not to become mesmerized by the term ‘governance’ and to decide that it is just something in the ‘nice-to-have’ category or in the ‘I-can’t-afford-to-have-it-yet’ category,” she says. “The integrity of the marketplace and its fairness and efficiency are dependent on creating best practice standards that are adhered to universally and create a ‘safe harbour’ for market participants. It is in your interests to be leaders in this initiative. You have the most to gain and the most to lose.”

She concluded by challenging investors relations professionals to lead the way in changing their ways, “My best advice to you is: change before you have to; make sure you are a survivor by responding wholeheartedly to change; and don’t delay!”