New corporate governance disclosure requirements relating to the
representation of women on boards and in senior management and
director term limits were released by most of the securities
regulatory authorities in Canada on October 15, 2014. These
amendments apply to TSX-listed and certain other non-venture
issuers only and will come into effect on December 31, 2014, in
time for the 2015 proxy season.
Women on Boards and in Senior
The requirements use a "comply or explain" model and
were developed with a view to increasing transparency regarding the
representation of women on boards and in senior management. Where
an issuer does not "comply" with the practices outlined
by the securities regulatory authorities, it will need to explain
"why it has not done so". In any event, the number and
proportion (in percentage terms) of directors on the board and of
executive officers of the issuer (and all major subsidiaries) who
are women must be disclosed. The securities regulatory authorities
intend this disclosure to assist investors when making investment
and voting decisions.
Briefly, here is what an issuer would need to do to
adopt a written policy relating to the
identification and nomination of women directors;
disclose details relating to that policy, including its
implementation, progress made on achieving its objectives and
measurement of its effectiveness;
disclose how the level of representation of women is considered
in the director nomination process and in making executive officer
adopt targets regarding women on the board and in executive
officer positions and disclose these targets and the progress made
on achieving them.
An issuer that is not in a position to make this disclosure in
time for the 2015 proxy season will need to explain "why it
has not done so".
Director Term Limits
As a related measure, with a view to promoting board renewal and
providing opportunities for women board candidates, an issuer will
need to disclose whether it has adopted term limits for the
directors on its board or other mechanisms for board renewal and
describe them. Otherwise, it will need to explain "why it has
not done so".
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.
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