New disclosure rules regarding the representation of women on the boards and in senior management of public companies, and term limits, will come into effect December 31, 2014. Disclosure will be required for all management information circulars (or annual information forms if the issuer does not send out a management information circular) which are filed following an issuer’s financial year ending on or after December 31, 2014. The CSA staff notice is available at the following link:
Securities administrators in all Canadian jurisdictions other than Alberta and British Columbia have approved the final rule. Although two jurisdictions are not participating, the rule nevertheless states that it amends a national instrument to add disclosure requirements that apply only in the participating jurisdictions.
The new rule is largely unchanged from the proposal issued by the OSC in January of this year and other participating jurisdictions in July. Under the new rule, companies will be required to disclose annually in the proxy circular for the annual meeting (or the annual information form if the issuer does not send a proxy circular to its investors):
- the number and percentage of women directors and women who are executive officers, together with any targets the company has adopted regarding the number or percentage of women in such positions and the progress made in achieving those targets;
- whether the company has a policy for the identification and nomination of women candidates for director or explain why it does not have one;
- a summary of any policy for the identification and nomination of women candidates for director which the company has adopted, the policy and its objectives, implementation measures, the annual and cumulative progress made on achieving the objectives and whether, and if so how, the board or nominating committee measures the policy’s effectiveness;
- whether it considers the level of representation of women on the board in identifying and nominating candidates for director and the level of representation of women in executive officer positions when making executive officer appointments, or explain why it does not consider these levels of representation;
- whether or not the company has adopted term limits for board service or other mechanisms for board renewal and, if not, why not.