On October 15, 2014, all of the securities regulatory authorities in Canada, other than in Alberta and British Columbia, announced that they were implementing amendments (the “Amendments”) to National Instrument 58-101 Disclosure of Corporate Governance Practices that would require all non-venture issuers to make certain “comply or explain” disclosure regarding term limits for directors as well as the representation of women on boards and in executive positions. The Amendments are intended to increase transparency regarding the representation of women on boards and in senior management roles by all non-venture issuers. Subject to receiving various ministerial approvals, the Amendments will come into effect on December 31, 2014, and therefore will apply for the 2015 proxy season.
The Amendments are substantially similar to the amendments previously proposed by the Ontario Securities Commission in January 2014 and by the other participating jurisdictions in July 2014. The Amendments, like the previously proposed amendments, will not impose targets or quotas, but will require all non-venture issuers to disclose each year in either their annual information forms or in the management information circulars:
- whether the issuer has adopted director term limits or other board renewal mechanisms, and if not, why not;
- whether the issuer has a written policy regarding the representation of women on the board, and if not, why not;
- whether the board or the nominating committee considered the level of representation of women in the director identification and selection process, and if not, why not;
- whether the issuer considers the representation of women in executive positions when making executive officer appointments, and if not, why not;
- whether the issuer has targets for the representation of women on its board and in executive officer positions, and the annual and cumulative progress in achieving such targets, and where there are no such targets, why not; and
- the number and proportion of women on the board and in executive officer positions of both the issuer and each of its “major” subsidiaries.
With the Amendments becoming effective in time for the upcoming proxy season, many issuers will need to consider the role of women on their boards and in senior management. Time will tell whether imposing a “comply or explain” approach will have the effect desired by the securities authorities.