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Tips for top AGM circular disclosure

Canada Publication December 20, 2021

The Canadian Coalition for Good Governance (CCGG) has released the 2021 edition of its Best Practices for Proxy Circular Disclosure

CCGG annually compiles examples of what it considers to be excellent disclosure by Canadian issuers in the areas of corporate governance and executive compensation. The examples are accompanied by brief explanations of the policies and principles of good corporate governance, which are further detailed in CCGG’s other publications.

In its 2021 edition, CCGG has highlighted many of the same principles of good disclosure as were contained in its earlier editions, with the following notable updates:

  • Board composition, diversity & succession planning: CCGG has added a new discussion regarding term limits, noting that while term limits and mandatory retirement ages can help promote board renewal, they cannot replace a robust annual board and individual director assessment process. CCGG has also enhanced its discussion regarding the importance of diverse boards, noting that in addition to diversity metrics and collecting data to support decision-making, companies also need to assess the progress they are making towards diversity objectives and make related disclosure.
  • Board skills matrix: While CCGG has long considered board skills matrices an important tool to aid in board assessments and recruitment planning, this year it has dedicated a section of its guidance paper to the topic. In particular, CCGG notes that environmental and social-focused capabilities should be included in a skills matrix where such skills and experiences are material to the company’s business or the board’s risk management and strategic planning.
  • Director interlocks: CCGG believes that boards should limit the number of interlocks, which are situations where directors serve on other boards together. New for 2021, best practice is not just to disclose the company’s policy on director interlocks and list which directors serve together on other boards, but the board should also review outside directorships regularly and disclose this practice.
  • Director continuing education: CCGG has enhanced its discussion regarding director education, noting as a best practice the inclusion of director input in developing the program, for example through an annual survey. This approach gives directors the opportunity to proactively address any knowledge gaps and allows companies to provide more focused and valuable sessions.
  • Board, committee and director performance assessments: In addition to providing specific disclosure regarding the specific themes that emerged from director assessments and actions taken to address the findings, CCGG has highlighted this year as a best practice disclosure regarding the specific methods used to solicit director feedback and the specific areas in which directors were asked to benchmark the board’s performance.
  • Executive succession and management diversity: CCGG has added to its discussion on executive successive planning a remark that such plans should consider various time horizons and seek to build capacity throughout the organization.
  • Executive compensation and risk management: In addition to clawback policies, CCGG notes this year that anti-hedging policies are another useful tool to manage compensation-related risk.


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