Stikeman Elliott can assist with the secure and confidential collection of enhanced diversity information from directors and senior management for the purposes of annual proxy circular disclosure.
Effective January 1, 2020, amendments to the Canada Business Corporations Act (CBCA) require that CBCA-incorporated distributing corporations (i.e., public companies) include prescribed diversity disclosure in their annual proxy circulars. While the disclosure requirements generally mirror those that were implemented under National Instrument 58-101 Disclosure of Corporate Governance Practices in 2014, the addition of new "designated groups" raises questions as to how this information should be collected.
In particular, the requisite disclosure includes the number and proportion, expressed as a percentage, of members of "designated groups" (defined as women, indigenous peoples, persons with disabilities and members of visible minorities) who are directors or members of senior management of the issuer. The collection of this type of information can be a delicate matter and issuers will have to rely on self-identification to determine whether directors or members of senior management fall within a designated group. The CBCA amendments do not require the issuer to identify the individuals who are members of these designated groups in their public disclosure.
How Stikeman Elliott Can Assist: CBCA Annual Diversity Survey Tool
While issuers may be inclined to request this information in an annual D&O questionnaire, we do not think that this approach will achieve the best result, nor does it sufficiently protect the sensitive nature of the information being collected. More specifically, asking participants to identify as members of designated groups will (or may) reveal grounds protected under the Ontario Human Rights Code (in particular, sex, ancestry, colour, race, ethnic origin or place or origin, citizenship, creed and disability).
In order to best encourage self-identification while preserving the privacy of survey participants, we generally recommend collecting diversity information on a voluntary, confidential and anonymous basis, in a manner that ensures that the data collected will only be used for the purposes of complying with the CBCA disclosure requirements.
In order to facilitate the self-identification process, our Knowledge and Innovation team has designed an online tool that, among other things, surveys an issuer's directors and senior management, restricts the information collected to only that which the issuer is required to know in order to comply with the CBCA requirements, alerts participants to why this data is being collected, and generates a user-friendly report summarizing the survey results, all on a confidential, voluntary and anonymous basis. With this tool, the collection of diversity information can be effectively managed in a secure fashion while respecting corporate leaders' personal information.
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