The securities regulators in 7 provinces and 2 territories announced on Wednesday, October 15,
2014, that the final version of the amendments to National
Instrument 58-101 Disclosure of Corporate Governance
Practices (NI 58-101) and Form 58-101F1
Corporate Governance Disclosure (Form
58-101F1) would include stringent requirements pertaining
to female representation on boards and in executive officer
positions. Securities regulators in Manitoba, New Brunswick,
Newfoundland and Labrador, Northwest Territories, Nova Scotia,
Nunavut, Ontario, Quebec and Saskatchewan have all signed on to the
The enhanced disclosure requirements pertaining to females on
boards, while significant, do not go so far as mandating quotas, as
seen in parts of Europe. The amendments will instead require all
TSX-listed issuers to disclose, either in their proxy circular or
annual information form, the following: any director term limits
and board renewal policies, policies pertaining to female
representation on the board, details on how the board or nominating
committee considers the representation of women in the director
identification and selection process, the issuer's
consideration of female representation when appointing executive
officers, any targets the issuer may have for female directors and
executive officers, and the number of women on the issuer's
board and in executive officer positions.
While the amendments require increased disclosure, some may
question their effectiveness, as they do not include disclosure
deadlines or penalties should a company fail to make the required
The amendments are the result of an Ontario-led effort to
increase the accountability of TSX-listed companies to shareholders
on the long standing issue of the under-representation of women on
boards. The Ontario Securities Commission initially released a
proposal on the issue in July 2013, followed by formal proposed
amendments to NI 58-101 and Form 58-101F1 in January 2014. With the
majority of the provincial securities regulators supporting the
amendments, the changes will come into effect across most of the
country on December 31, 2014.
2015 Proxy Season
These amendments are sure to have an impact on the 2015 proxy
season. The issue of female representation on boards is not new to
investors. Indeed, there is evidence to suggest that more women on
the board and in senior management positions will have a positive
impact on a corporation's financial performance and corporate
culture. It is no surprise then that shareholders and proxy
advisory firms have been advocating for improved female
representation for both board and executive officer positions,
it's just good business.
With mounting data on the issue, it's possible that
investors will place increased pressure on TSX-listed issuers to
comply with the new requirements in this upcoming proxy season.
Female representation on boards varies depending on the industry,
with the mining industry having a particularly poor record. That
industry is also known for having an active shareholder base, and
whether they will make demands for more female board members will
be something to look for in 2015. While the amendments to the
securities laws may lack a formal enforcement mechanism, it will be
interesting to observe the extent to which investors demand
disclosure and hold corporations accountable come proxy season.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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