On October 5, 2017, the securities regulatory authorities in all Canadian provinces and territories, apart from BC and Prince Edward Island, released their third annual review of women serving on boards and in executive officer positions. Their findings were published in CSA Multilateral Staff Notice 58-309 – Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices.

The notice discusses results from a review of corporate governance disclosure of 660 non-venture issuers regarding women in leadership roles in accordance with National Instrument 58-101 – Disclosure of Corporate Governance Practices ("NI 58-101"). NI 58-101 takes a "disclose or explain" approach; the approach requires non-venture issuers in most provinces to disclose information about their policies and procedures regarding the representation of women on boards and in executive officer positions, or to explain the absence of such policies or procedures.  Information to be disclosed includes:

  • whether the issuer has a specific policy regarding the identification and nomination of women directors;
  • if and how the board considers the level of representation of women on the board and in executive officer positions in identifying nominees for election or appointment; and
  •  if there is any target level of women on the board or in executive officer positions.

The study analyzed issuers with year ends between December 31, 2016 and March 31, 2017 and compared the results with the study conducted three years ago, finding the following:

  • The total board seats occupied by women has increased from 11% to 14%.
  • The percentage of issuers with at least one woman on their board increased from 49% to 61%.
  • For issuers with a market capitalization of more than $10 billion, 24% of board seats are held by women, in contrast to 21% in the first year.
  • Of the issuers in the sample, issuers with at least one woman in an executive officer position increased from 60% to 62%.
  • The percentage of issuers that adopted a policy relating to the representation of women on their board increased from 15% to 35%.

Although there has been an increase in the percentage of issuers who have adopted the required policies, the CSA notes several deficiencies in disclosure including a clear explanation of how the policy adopted by the issuer applies to the identification of women directors. In addition, while issuers have disclosed that they have adopted targets regarding the representation of women on boards and in executive positions, there is a lack of information showing the annual progress of these issuers in terms of achieving these targets. Lastly, the Staff Notice remarks that for those issuers who adopt term limits or other mechanisms of board renewal, the disclosure regarding the description of those limits and how they contribute to board renewal, is inadequate.

Issuers must provide the requisite disclosures to the respective regulatory authorities. Failure to comply with disclosure requirements may result in regulatory actions.

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