Corporations Canada has published guidance to help public CBCA companies prepare their annual diversity disclosure.
Diversity disclosure requirements
Since January 2020, public companies existing under the Canada Business Corporations Act (CBCA) have had to make certain disclosures about the diversity of their boards of directors and C-suites. The disclosure centers on the representation of four designated groups: women, Indigenous peoples, persons with disabilities and members of visible minorities. Among other things, CBCA companies have to disclose annually whether or not they have targets in place to enhance representation by these four groups and, if not, why not. They must also disclose statistics regarding the number of directors and members of senior management in each designated group. Additional information about the legislative requirements is available here.
Following a review of the disclosure made by CBCA companies in the first year since the new requirements came into force, Corporations Canada has published guidance to help companies present certain parts of the required disclosure more consistently and clearly. The following is a summary of its recommendations:
Corporations Canada recommends using a table format to disclose the following required information, with data for the board and senior management presented in separate rows:
- whether or not the company has adopted a target for each of the four designated groups; and
- if targets have been adopted, the target for each designated group (as a number, percentage or range) and the intended timeframe for achieving each target.
Corporations Canada also recommends using a table format to disclose the number and percentage of directors and officers in each of the designated groups, again with data for the board and senior management presented in separate rows. The table should include:
- not just the number of directors / senior management team members in each designated group, but also the total number of directors on the board and the total number of senior management team members;
- a zero or “nil” where there are no members of a designated group; and
- an indication of whether an individual is a member of more than one designated group (optional but recommended).
Additional, Voluntary Disclosures:
If the company chooses to disclose targets and statistics for a group outside of the four designated groups (such as the LGBTQ+ community) or to expand the application beyond senior management (such as to a broader group of management or to the entire workplace), it should disclose those targets and statistics separately.
Date of Information:
Companies should clearly disclose the date of the information, which may be presented as of the company’s financial year-end, the date of the circular or another date chosen by the company. For purposes of disclosing actual numbers and percentages of directors that belong to each designated group, companies may want to disclose the information both as at the date of the circular and as at the date immediately following the shareholders’ meeting, assuming that all the nominees for directors are elected.
It is important for CBCA companies to file their diversity disclosure with Corporations Canada, which can be done by filing the entire management information circular or just the relevant excerpts. It is not sufficient to file the circular on SEDAR. Additional information is available here.
The new diversity disclosure guidelines from Corporations Canada are available here. A copy of the report with the findings and statistics following the first year of diversity disclosure is available here.
Refer also to our previous publication on the CBCA diversity requirements and our observations of the challenges faced by companies last year and recommendations for improvements, available here.