On December 31, 2014, the security regulatory authorities in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Quebec, Saskatchewan and Yukon implemented amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices that require non-venture issuers to disclose on an annual basis:
- the number and percentage of women on the issuer's board of directors and in executive officer positions;
- director term limits or other mechanisms of board renewal;
- policies relating to the identification and nomination of women directors;
- consideration of the representation of women in the director identification and nomination process and in executive officer appointments; and
- targets for women on boards and in executive officer positions.
Non-venture issuers that do not disclose the above information are required to explain their reasons for not doing so. The increased transparency regarding the representation of women on boards and in executive officer positions is intended to assist investors when making investment and voting decisions.
On September 28, 2015, the Canadian Securities Administrators (the "CSA") published CSA Multilateral Staff Notice 58-307 Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices (the “Staff Notice”). The Staff Notice summarizes the findings of the CSA’s review of disclosure related to the above rule amendments.
Based on a sample of 722 issuers listed on the Toronto Stock Exchange, the Staff Notice reveals the following statistics with respect to the representation of women on boards:
- 49% have at least one woman on their board.
- 60% have at least one woman in an executive officer position.
- 15% have added one or more women to their board this year.
- Over 30% of the issuers with a market capitalization above $2 billion have adopted a written policy for identifying and nominating women directors.
- Of those with written policies, 48% disclosed that they were adopted or updated this year.
- 60% of the issuers with a market capitalization above $2 billion have two or more female directors.
- 19% have adopted director term limits, while 56% have adopted other mechanisms of board renewal.
The Staff Notice also provides guidance on compliance with Form 58-101F1 Corporate Governance Disclosure, which includes guidelines on and examples of improving disclosure with respect to board renewal processes, written policies regarding representation of women on the company’s board and the consideration of the representation of women in the director and executive officer identification and selection process.
The Staff Notice concludes that many non-venture issuers require additional guidance concerning the level and detail of disclosure that is necessary to satisfy the requirements of the rule amendments. The CSA notes that it will continue to evaluate the corporate governance disclosure of non-venture issuers to ensure that meaningful disclosure is provided regarding the representation of women on boards and in executive officer positions and to measure if the disclosure ultimately achieves its intended purpose of increasing transparency.