New Disclosure Rules for Non-Venture Issuers Regarding Women on Boards and in Senior Management
The securities regulatory authorities in the majority of the provinces and territories of Canada recently announced the final implementation of new corporate governance disclosure rules regarding the representation of women on boards of directors and in senior management. Provided all necessary Ministerial approvals are obtained, amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices and Form 58-101F1 Corporate Governance Disclosure (collectively, the “Rule Amendments”) will come into effect on December 31, 2014, in time for the 2015 proxy season.
The Rule Amendments are intended to increase transparency for investors and other stakeholders regarding the representation of women on boards and in senior management of non-venture issuers, meaning, essentially, issuers listed on the Toronto Stock Exchange (the “TSX”). This transparency is intended to assist investors when making investment and voting decisions.
The Rule Amendments will require non-venture issuers to provide disclosure using a “comply or explain” approach regarding the following matters in their proxy circular or annual information form which are to be filed following an issuer’s financial year ending on or after December 31, 2014:
- director term limits and other mechanisms of board renewal, or why the issuer has not adopted such limits;
- written policies relating to the identification and nomination of women on the board of directors, or why the issuer has not adopted such policies;
- the board of directors’ or the nominating committee’s consideration of the representation of women in the director identification and selection process, or the issuer’s reasons for not making such considerations;
- the issuer’s consideration of the level of representation of women in executive officer positions when making executive officer appointments, or the issuer’s reasons for not making such considerations;
- the issuer’s target number or percentage, or a range of numbers or percentages, regarding the representation of women on boards and in executive officer positions by a specified date, or why the issuer has not adopted such targets; and
- the number and percentage of directors on the issuer’s board who are women and the number and percentage of executive officers of the issuer, including all major subsidiaries of the issuer, who are women.
The Rule Amendments are being implemented by the securities regulatory authorities in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Quebec and Saskatchewan. British Columbia is not participating in the Rule Amendments; however, British Columbia issuers which are listed on the TSX will still be required to comply with the new disclosure requirements.
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