The provincial securities regulators through the Canadian Securities Administrators launched a project to recommend a change in corporate governance from a system based on rules to one based on principles, and recently withdrew the proposal. The CEOs and business leaders on the COMPAS business panel are greatly relieved. By a margin of more than 3:1, they believe that Canada should turn its back on a rule-based system.

The key reason is their widespread believe that a system of principles is problematic because of a vagueness and hence unenforceability of the principles.

On the slightly different issue of creating a single national regulator, panelists are overwhelmingly supportive of doing so despite provincial opposition in Quebec and Alberta so long as the plan is deemed constitutional by the courts. They believe that the federal government should create a single regulator over the opposition of Quebec, which, they feel, would lose significant investment monies if it were able to opt out of the single regulator regime.

Panelists are bullish on a single regulator, which, they predict, will outperform the current provincial regulators and indeed the U.S. Securities and Exchange Commission as well.

These are the key findings from this past week’s Internet survey of CEOs and business leaders on the COMPAS panel. The weekly business survey is undertaken for Canadian Business magazine under sponsorship of BDO Dunwoody LLP.

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