Securities regulators in Ontario, Quebec, Saskatchewan, Manitoba, Newfoundland, New Brunswick, the Northwest Territories, Nova Scotia and Nunavut have published amendments to the corporate governance disclosure requirements (the Amendments), which are intended to increase disclosure transparency regarding the gender diversity of boards of directors of public issuers in Canada.
The Amendments, which will come into force on December 31, 2014, provide for enhanced disclosure by TSX-listed issuers and other non-venture reporting issuers on the representation of women on an issuer's board of directors and in senior management in an effort to provide greater transparency to investors and other stakeholders.
The Amendments amend the disclosure prescribed by Form 58-101F1 National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101). Publication of the amendments follows the OSC's publication of proposed rules for public comment at the beginning of the year, which were subsequently published by the other participating regulators in July 2014. The OSC originally published a Consultation Paper 58-401 Disclosure Requirements Regarding Women on Boards and in Senior Management in 2013, which launched a consultation on the topic following a request from Ontario's minister of finance and the minister responsible for women's issues.
NI 58-101 requires issuers to disclose if they comply with each corporate governance principle set out in the instrument and, if not, why they do not. The Amendments will require TSX-listed and other non-venture reporting issuers in the participating jurisdictions to make annual disclosure of:
- Director term limits. An issuer must disclose whether or not it has adopted director term limits and, if not, why not. A description of any term limits and other mechanisms of board renewal must be included. Director term limits may provide opportunities for the nomination of qualified board candidates, including women.
- Representation of women on the board of directors. An
issuer must disclose:
- whether or not the issuer has adopted a written policy for identifying and nominating women directors and if not, why not. If a policy has been adopted, its key provisions should be summarized, disclosure regarding the policy's effectiveness should be made and the annual and cumulative progress in achieving the objectives of the policy should be set out; and
- whether and, if so, how the board or the nominating committee considers the representation of women in the director appointment process.
- Representation of women in executive officer positions. An issuer must disclose whether it considers the level of representation of women in executive officer positions when making such appointments and, if not, the reasons for not doing so.
- Targets for representation of women. The Amendments require an issuer to disclose whether or not it has adopted targets regarding the number or percentage of women on its board or in executive officer positions by a specific date. If no targets have been adopted, then the issuer should explain why not. If such targets have been adopted, then the issuer should disclose its annual and cumulative progress in achieving these targets.
- Number of women on the board of directors and in executive officer positions. Disclosure will be required of the number and percentage of directors and executive officers of the issuer (including its subsidiaries) who are women.
The Amendments will apply to management information circulars, and annual information forms filed following an issuer's year ending on or after December 31, 2014, require this disclosure in the upcoming proxy season. The Notice of Amendments can be accessed here.
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.