On September 14, 2016, Alberta's securities regulator
published for comment proposed amendments to National Instrument
58-101 Disclosure of Corporate Governance Practices (NI
58-101) and Form 58-101F1 Corporate Governance Disclosure.
These changes include new "comply or explain" reporting
rules requiring companies to disclose the following in their proxy
circular or annual information form:
Policies regarding the representation
of women on the board, if any;
Whether the board or its nominating
committee considers the representation of women in the director
identification and selection process;
Whether the issuer considers the
representation of women in executive officer positions when making
executive officer appointments;
Targets regarding the representation
of women on the board and in executive officer positions, if any
have been set by the issuer;
The number of women on the board and
in executive officer positions; and
Director term limits or other
mechanisms of board renewal.
This proposal is open for comment until October 14. The
objective of these rules, according to the Alberta Securities
Commission (ASC), is to provide transparency that assists
shareholders when making investing and voting decisions and to
bring Alberta in line with most other provinces (with the
exceptions of British Columbia and Prince Edward Island) that
adopted these reporting rules in 2014 and brought them into effect
As of September 28, 2016, the Canadian Securities Administrators
reported that Canadian companies are making some, but slow progress
adding women to their boards. Canada's
largest companies have made more progress than small companies, the
review said. A review of diversity disclosure reports filed this
year by 677 companies listed on the Toronto Stock Exchange shows
that 21 per cent clearly disclosed they have adopted a policy
related to the identification and nomination of women, up from 15
per cent last year. 18 per cent have diversity policies that do not
specifically address women, and 59 per cent do not have written
policies. Regulators have previously said that they will give
companies up to 2017 before reviewing whether to further toughen
the rules in this regard.
As foreshadowed in the Spring 2015 Federal government budget,
the Government of Canada introduced Bill C-25, to amend the Canada Business
Corporations Act. The legislation follows over two years of
stakeholder consultation and is aimed at modernizing Canada's
legal and regulatory framework for nearly 270,000 federally
incorporated corporations. The legislation would also amend the
Canada Cooperatives Act and the Canada Not-for-profit
Corporations Act. It passed first reading on September 28,
Some important changes proposed in the legislation include:
Requirements for listed CBCA
corporations to hold annual elections and individual votes for
director candidates. This is in contrast to slate voting.
These are requirements to which TSX-listed companies must already
adhere and many companies had previously adopted these requirements
Except in limited circumstances,
directors now must receive a majority of votes in favour of their
election. This aims to address concerns over failed director
elections raised by many during consultation.
Modification of the CBCA's
requirements for paper-based communications by replacing this with
a "notice and access" system, allowing corporations to
use electronic communications to provide notice of meetings to
shareholders and online access to relevant documents.
Not unlike the previously mentioned
"comply or explain" rules, legislative requirements for
certain corporations to place before the shareholders, at every
annual meeting, information respecting diversity among directors
and among the members of senior management. This is a far cry from
a quota regime, but there is not yet a consensus among academics
and industry watchers that diversity quotas are the best
Proposed changes like these on the regulatory and legislative
fronts do not happen frequently, or swiftly, in Canada. They are
often the result of numerous calls for change, academic and
industry studies, activism (in many forms) and consultation.
It's early days, yes, but it appears that solid steps are being
taken to catch up with the corporate winds of change in Canada.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).