Article by David George-Cosh, BNN Bloomberg
CannTrust Holdings Inc.’s (TRST.TO 4.53%) board of directors is comprised of a number of family and other pre-existing relationships that are raising questions about independence as the embattled cannabis producer seeks to clean house and return to regulatory compliance.
Mark Dawber, who became chair of the company’s independent committee last week, also serves on the board of Gencan Capital Inc., an investment firm focused on solar energy that trades on the Canadian Securities Exchange. Mark Litwin, CannTrust’s vice-chairman, serves as Gencan’s president and his father Fred is chairman of the firm. Also, Litwin’s wife Beth is the niece of Robert Marcovitch, the interim CannTrust chief executive officer and former chair of the company’s independent committee.
Richard Leblanc, a professor of governance, law, and ethics at York University, described Dawber’s relationship with CannTrust and Gencan Capital board members as well as Marcovitch’s family ties to Litwin as an interlock which needs to be remedied immediately.
“If a family member or an affiliate of a director has any pre-existing relationship to another director or officer, that director is not properly regarded as independent from a best practice perspective,” Leblanc told BNN Bloomberg via email. “Their ability to oversee any such director has been compromised. This lack of independence heightens the capacity for risk governance failure.”