On October 15, 2014, securities regulators in a number of Canadian jurisdictions including Ontario announced that they are implementing amendments to corporate governance disclosure requirements concerning board renewal and the representation of women on boards and in executive officer positions.  The new disclosure requirements will only apply to TSX-listed issuers (and other non-venture issuers). However, the new disclosure requirements will not apply to those issuers that are only reporting issuers in British Columbia and/or Alberta. It is expected that the amendments will apply to disclosure in respect of issuers' financial years ending on or after December 31, 2014, and that most non-venture issuers will need to include the required disclosure in their proxy materials sent during 2015.

The final amendments are similar to the proposals originally published for comment by the Ontario Securities Commission and other CSA jurisdictions earlier this year, however with some notable changes. Consistent with the initial proposals, the final amendments do not introduce mandatory quotas or targets but instead adopt a "comply or explain" model.

The new disclosure requirements include the following:

  • Director term limits and other mechanisms of board renewal

    Issuers will be required to disclose if they have adopted term limits for directors or other mechanisms of board renewal (for example, the regular assessment of the effectiveness and contribution of directors or mandatory retirement ages), and a description of such term limits or other mechanisms. If term limits or other mechanisms have not been adopted, the issuer must explain why.  The addition of other mechanisms of board renewal from the initial proposals recognizes that there may be a variety of ways to ensure board renewal in addition to term limits.
  • Policies regarding the representation of women on boards

    Issuers will be required to disclose whether they have adopted policies relating to the identification and nomination of women on boards, including a short summary of the policy's objectives and key provisions, implementation measures, annual and cumulative progress in achieving the policy's objectives and effectiveness measures. The final amendments also clarify that the policies discussed above must be written and not informal unwritten policies. If written policies have not been adopted, the issuer must explain why.
  • Consideration of the representation of women in the director identification and selection process

    Issuers will be required to disclose if and how they consider the number of women on their board when identifying and nominating candidates for election or re-election. If an issuer does not give this consideration, the issuer must explain why.
  • Consideration given to the representation of women in executive officer appointments

    Issuers will be required to disclose if and how they consider the number of women executive officers that they have when making executive officer appointments. If an issuer does not give this consideration, the issuer must explain why.
  • Issuer's targets regarding the representation of women on the board and in executive officer positions

    Issuers will be required to disclose whether they have adopted targets regarding women representation on their board and in executive officer positions, a description of the adopted targets, and annual and cumulative progress in achieving such targets. For these purposes, a target means a number or percentage (or range) of women directors or women in executive officer positions by a specified date. If targets have not been adopted, the issuer must explain why.
  • Number of women on the board and in executive officer positions

    Issuers will be required to disclose the number and proportion of (a) women directors on the issuer's board, and (b) women in executive officer positions at the issuer (including at its major subsidiaries).  The final amendments clarified that disclosure of executive officer positions does not apply to all subsidiaries but only to "major subsidiaries" (which is a defined term in the securities legislation).

To learn more about Women on Boards, please watch this videocast from our Trending2014 series.

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