On October 2, 2019, securities regulatory authorities in Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan published CSA Multilateral Staff Notice 58-311 Report on Fifth Staff Review of Disclosure Regarding Women on Boards and in Executive Officer Positions. The notice summarizes a review of the disclosure made by 641 reporting issuers under Form 58-101F1 Corporate Governance Disclosure, particularly as it relates to gender diversity among corporate leadership. The 2019 review is the fifth annual review on the matter. Highlights of the results from this year's review are set out below.
General Findings on Gender Diversity
The 2019 review found issuers reported a slight improvement in gender diversity among board and executive members. In particular, the following trends were observed from this year's review:
- 17% of total board seats were occupied by women (up from 15% last year and 11% in 2015);
- 73% of issuers reported having at least one women on their board (up from 66% last year and 49% in 2015);
- 15% of issuers reported having at least three women on their board (up from 13% last year and 8% in 2015);
- 33% of board vacancies were filled by women (up from 29% last year and 26% in 2017);
- 64% of issuers reported having at least one women in an executive officer position (down from 66% last year resulting in part by a change in the methodology used to capture executive officer data and up from 60% in 2015); and
- 4% of issuers reported having a women chief executive officer (CEO) (no change from last year) and 15% of issuers reported having a women chief financial officer (CFO) (up from 14% last year).
It is worth noting that securities regulatory authorities in Alberta and Québec also released province-specific data based on their review of disclosure made by 132 Alberta-based and 60 Quebec-based issuers, respectively. In general, Quebec reported more favourable results across the board, including higher female representation on boards (23% of total seats), whereas Alberta reported less favourable results across the board, including lower female representation on boards (14% of total seats).
Cap Size and Industry
The 2019 review found the number of women on boards varied by industry and the size of the issuer. In particular, the following trends were observed from this year's review:
- the manufacturing (93%), retail (86%), and utilities (85%) industries had the highest percentage of issuers with one or more women on their boards, while mining (62%), biotechnology (67%), and oil & gas (70%) had the lowest; and
- issuers with a market capitalization of greater than $10 billion had 27% of board seats filled by women (up from 25% last year and 21% in 2015), compared to 13% for issuers with a market capitalization of less than $1 billion (up from 11% last year and 8% in 2015).
Targets and Policies
The 2019 review found that issuers with targets and policies regarding the representation of women on boards had higher average female board representation. In particular, the following trends were observed from this year's review:
- 22% of issuers adopted targets for the representation of women on their boards (up from 16% last year and 7% in 2015) and those issuers with targets had higher average female representation on their boards (24%) as compared to those without targets (15%); and
- 50% of issuers adopted a policy relating to the identification and nomination of women directors (up from 42% last year and 15% in 2015) and issuers with such a policy had higher average female board representation (21%) as compared to those with no policy (13%).
The 2019 review found that issuers continue to be reluctant to set director term limits, which could hinder the goal of gender parity. Research suggests that director term limits can promote an appropriate level of board renewal, and in doing so, provide an opportunity for qualified board candidates, including those who are women to take a seat. The following trends were observed from this year's review:
- 21% of issuers adopted director term limits (no change from the previous three years);
- of those issuers with term limits, 44% set age limits (average age limit being 73 years), 25% had tenure limits (average tenure limit being 13 years), and 31% had both;
- 36% of issuers adopted other mechanisms of board renewal, including assessments of the board and individual directors, but did not adopt term limits; and
- 39% of issuers did not have director term limits nor had they adopted other mechanisms of board renewal.
The Canadian Securities Administrators ("CSA") intends to publish the underlying data from the 2019 review by early 2020 and maintains that they will continue to monitor trends in this area. However, neither the 2019 review nor CSA's 2019-2022 business plan indicates whether or not the CSA is actively considering imposing additional measures aimed at increasing gender diversity on boards and in executive officer positions. It is uncertain whether the recent amendments to the Canada Business Corporations Act ("CBCA") will impact the CSA's decision or their annual review next year as the amendments, among other things, will require publicly-listed CBCA corporations, including venture issuers, to provide greater disclosure on board and executive officer diversity policies and statistics beginning in 2020.
We will continue to monitor developments in this dynamic area of law.
 Note that the CSA staff review of disclosure does not include all reporting issuers. The 2019 review includes, generally, all issuers listed on the Toronto Stock Exchange ("TSX") and other non-venture issuers with year-ends between December 31, 2018 and March 31, 2019, and which filed information circulars or annual information forms by July 31, 2019. The statistics do not include data from larger Canadian banks, who are often early adopters of diversity programs.
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