Canada: Promoting Diversity In The Boardroom And Within Management: New Diversity Disclosure Requirements For CBCA Distributing Companies

Capital Perspectives - Ottawa Newsletter
Last Updated: September 27 2019
Article by Virginia K. Schweitzer and Caroline Zechel

As of January 1, 2020, distributing corporations governed by the Canada Business Corporations Act (CBCA) will be required to provide additional information to shareholders regarding diversity among their boards of directors and within senior management of the corporation. The additional diversity disclosure will be required in conjunction with the corporation's notice of meeting and/or management proxy circular for its annual meeting of shareholders to be held in 2020. Distributing corporations, typically public companies, will be required to disclose diversity policies as well as numbers and percentages of members of "designated groups" (as further described below), namely, women, Aboriginal persons, members of visible minorities and persons with disabilities which are identified among their directors and senior management.

The new CBCA disclosure requirements, set out in the amended section 172.1 of the CBCA and corresponding CBCA regulations (the "Regulations"), are aimed at broadening existing disclosure requirements for distributing corporations. While disclosure requirements under Canadian securities law, National Instrument 58-101 Disclosure of Corporate Governance Practices, have been limited to gender and have only applied to certain distributing corporations, such as those listed on the Toronto Stock Exchange (TSX), the new CBCA disclosure requirements will go beyond gender and will apply to all distributing corporations, including "venture issuers," typically listed on the TSX Venture Exchange (TSXV) and the Canadian Securities Exchange (CSE).

Legislative Background

Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act and the Competition Act, received Royal Assent on May 1, 2018. This bill introduced a number of amendments to the CBCA with respect to distributing corporations and cooperatives, including measures to implement diversity disclosure requirements and supporting regulations at a later date. On June 22, 2019, an order in council fixed January 1, 2020 as the date the new disclosure rules will come into force. Regulations were also published on June 22 that provide more detailed information on the diversity disclosure requirements.

The Regulatory Impact Analysis Statement (RIAS) which accompanies, but does not form part of, the Regulations, identified that diversity on boards of directors and within senior management continues to be an issue in Canada as well as other countries. The RIAS noted that gender has been a primary focus but that the issue of diversity is broader and under-representation of women, Aboriginal peoples, peoples with disabilities and members of visible minorities impacts matters of board quality, fairness and performance.

Designated Groups

Under the CBCA amendments, distributing corporations will be required to provide diversity information to shareholders about members of the board of directors and senior management, including the number and percentage of members of "designated groups," as defined under section 3 of the Employment Equity Act (Canada), namely:

  • Women
  • Aboriginal peoples
  • Persons with disabilities: persons who have a long-term or recurring physical, mental, sensory, psychiatric or learning impairment and who
    • consider themselves to be disadvantaged in employment by reason of that impairment, or
    • believe that an employer or a potential employer is likely to consider them to be disadvantaged in employment by reason of that impairment,

and includes persons whose functional limitations owing to their impairment have been accommodated in their current job or workplace;

  • Members of visible minorities: persons, other than Aboriginal peoples, who are non-Caucasian in race or non-white in colour.

Notwithstanding the definition of designated groups, corporations are free to include information about the representation of members of other groups who hold positions on the board of directors or in senior management.

Diversity Disclosure Requirements

The diversity information requirements will be based on a "comply or explain" model which is similar to existing disclosure requirements in place under Canadian securities laws rather than imposing quotas or specific requirements. According to this model, as of January 1, 2020, companies will either "comply" by disclosing their diversity policies and objectives or "explain" why they have not implemented such a policy.

The diversity information that will need to be addressed under the disclosure requirements includes:

  • whether or not the corporation has adopted term limits for the directors on its board or other mechanisms of board renewal and a description of those term limits or mechanisms;
  • whether or not the corporation has adopted a written policy relating to the identification and nomination of members of "designated groups" for directors and the reasons for not adopting such a policy;
  • if the corporation has adopted a written policy referred to above:
    • a short summary of the policy's objectives and key provisions;
    • a description of the measures taken to ensure effective implementation;
    • a description of the annual and cumulative progress in achieving the objectives of the policy; and
    • whether or not the board of directors or its nominating committee measures the effectiveness of the policy and how it is measured.
  • the consideration of the level of the representation of designated groups in identifying and nominating candidates for election or re-election to the board of directors and when appointing members of senior management and how that level is considered;
  • the number and proportion (in percentage form) of members of each designated group on the board of directors and in senior management; and
  • target numbers or percentages for members of each of the designated groups to hold positions on the board of directors or to be members of senior management by a specific date, the target and the annual and cumulative progress of the corporation in achieving that target.

The information regarding diversity must be provided separately and not just on an aggregated basis for the designated groups.

For purposes of the CBCA diversity disclosure requirements, "senior management" has the same meaning as "executive officers" as defined in National Instrument 51-102 Continuous Disclosure Obligations.

Key Takeaways

To ensure compliance with the new diversity disclosure regime, distributing corporations should educate themselves on the information requirements and the definitions of members of the designated groups as defined in the Employment Equity Act (Canada).

The 2020 proxy season for distributing corporations will arrive quickly and therefore corporations do not have much time to prepare to meet these new disclosure requirements. The burden on venture issuers is potentially more significant given that they were previously exempt from these types of disclosures.

There is no requirement to identify the individuals who are members of the designated groups as part of the disclosure but whether individuals, on the board or within senior management, will be comfortable self-identifying on a corporation's voluntary questionnaire remains to be seen. Corporations should consider starting to collect relevant information within their organizations to ensure the disclosure process is timely and accurate.

Corporations are also permitted to include other groups at their own discretion so it will be interesting to see whether corporations determine to add additional disclosure beyond what is required under the new disclosure requirements.

To read the full Capital Perspectives: Ottawa Newsletter, please click here (PDF)

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

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions