Bank Act

Marginal note:Cumulative voting

• 168 (1) Where this Act or the by-laws provide for cumulative voting,

  • (a) there shall be a stated number of directors fixed by by-law and not a minimum and maximum number of directors;

  • (b) each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected, and the shareholder may cast all such votes in favour of one candidate or distribute them among the candidates in any manner;

  • (c) a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting two or more persons to be elected by a single vote;

  • (d) if a shareholder has voted for more than one candidate without specifying the distribution of the votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted;

  • (e) if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled;

  • (f) each director ceases to hold office at the close of the next annual meeting of shareholders following the director’s election;

  • (g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and

  • (h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.

• Marginal note:Mandatory cumulative voting

  (2) Where the aggregate of the voting shares beneficially owned by a person and any entities controlled by the person carries more than 10 per cent of the voting rights attached to all the outstanding voting shares of a bank, the directors shall be elected by cumulative voting.

• Marginal note:Exception

  (3) Subsection (2) does not apply

  • (a) where all the voting shares of the bank that are outstanding are beneficially owned by

    • (i) one person,

    • (ii) one person and one or more entities controlled by that person, or

    • (iii) one or more entities controlled by the same person;

  • (b) in respect of a bank that was in existence immediately prior to the day that subsection comes into force whose shareholders are confined to entities incorporated or formed by or under an Act of Parliament or of the legislature of a province that are, in the opinion of the directors, operating as credit unions or cooperative associations.

• Marginal note:Exception

  (3.1) Subsection (2) does not apply to a widely held bank with equity of five billion dollars or more or to a bank in respect of which subsection 378(1) applies.

• Marginal note:Transitional election

  (4) Where this Act or the by-laws of a bank provide for cumulative voting, the shareholders of the bank shall,

  • (a) at the first annual meeting of shareholders held not earlier than ninety days following the date that cumulative voting is required under subsection (2) or provided for in the by-laws, and

  • (b) at each succeeding annual meeting,

  elect the stated number of directors to hold office until the close of the next annual meeting of shareholders following their election.

• Marginal note:Exception

  (5) Nothing in this Act precludes the holders of any class or series of shares of a bank from having an exclusive right to elect one or more directors.