The Canadian National Railway Company faces criticism from a large investor over the disclosure of the resignation of a member of the board of directors.
Julie Godin resigned from the railroad board on September 16, the day after CN learned it had lost the battle to buy the U.S. Kansas City Southern Railroad to compete with the Railroad. Canadian Pacific Ltd.
CN did not issue a press release about Ms Godin’s departure, instead posting a web link to a document created on September 24 announcing her move.
CN said in an email to The Globe and Mail on Wednesday that Ms Godin had stepped down from the board to focus on the growing tasks of her day job as an executive at CGI Inc., the technology company of the information co-founded by his father, Serge Godin.
Ms. Godin could not be reached for comment.
The Children’s Investment Fund Management Inc. (TCI), which is CN’s second largest shareholder with 5.2 percent, said it intends to report what it calls CN’s lack of disclosure to credit agencies. Canadian regulations.
“His resignation and CN’s failure to publicly disclose it in a press release raise serious corporate governance and safety concerns,” said Christopher Hohn, founder of TCI, in a letter to CN chairman , Robert Pace.
TCI has announced the launch of a proxy contest to overthrow Mr. Pace and four other board members, including Jean-Jacques Ruest, CEO of CN. The UK investor is unhappy with CN’s financial performance and share price, in addition to what he calls CN’s failed attempt to buy KCS.
Mr Hohn said CN had numerous opportunities to reveal Ms Godin had resigned, including a Sept. 17 conference call with analysts and subsequent meetings with investors to discuss the company’s new strategic plan.
In the September 17 call, held a day after Ms. Godin resigned, CN unveiled its response to TCI’s calls for new leadership, outlining steps it would take to increase profits and shareholder returns. . CN has said it will add two members to the board in 2022, including replacing Mr. Pace, who is retiring, but did not mention Ms. Godin’s departure.
“CN made the required disclosure regarding Julie Godin’s resignation on September 24, within the 10 calendar day period specified by” securities regulators, CN spokesperson Mathieu Gaudreault said in an email to World.
Ms. Godin, an independent director who has served on the railway’s finance and strategic planning committees, received $ 383,000 in cash and shares from CN in 2020.
Sylvain Théberge, spokesperson for the Autorité des marchés financiers du Québec, declined to comment on CN. “The general rule concerning the event-related disclosure by [companies] is that any material change should be disclosed immediately through a press release, ”he said, adding that companies themselves determine what constitutes a material change.
According to the policy of the securities regulatory authorities in Canada, “changes to the board of directors or senior management” are “potentially material information”.
In its battle for the CN boardroom, TCI has targeted directors Kevin Lynch, James O’Connor and Laura Stein, in addition to Mr. Pace and Mr. Ruest.
TCI wants to install railroad veteran Gilbert Lamphere as president; and appointed the following individuals as directors: Allison Landry, banker and director of the freight company XPO Logistics Inc .; Rob Knight, former chief financial officer at Union Pacific Railroad Co.; and Paul Miller, a former CN executive. Former CN and Union Pacific operations manager Jim Vena is TCI’s choice to be CEO.
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