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Canadian securities regulators publish results of diversity disclosure review

Canada Publication March 15, 2021

The Canadian securities regulators have published the results of their sixth consecutive annual review of disclosure regarding women on boards and in executive officer positions. While the securities regulators will not publish the underlying data from their review until this summer, at a high level their findings indicate improvements in many of the targeted areas since they started reviewing this information in 2015. The developments described below were based on their review of 610 TSX-listed issuers that are required to disclose this information annually. 


Key trends

The securities regulators’ report noted the following key trends:  

  • Board Seats. The percentage of women who held board seats varied by issuer size and industry. The larger the market capitalization of the issuer, the greater percentage of board seats held by women. For example, while women held 20% of the board seats of all 610 issuers, 31% of board seats of issuers with market capitalizations greater than $10 billion were held by women. Issuers in the manufacturing, real estate and retail industries also showed the strongest results for having one or more women on their boards. 
  • Executive Officer Positions. 65% of issuers had at least one woman in an executive officer position, a figure that has not changed materially since the securities regulators’ initial review in 2015 and that – like the board representation findings – varied by industry. Few issuers have a woman chief executive officer or chief financial officer (5% and 15%, respectively).  
  • Targets. Most issuers have not adopted targets for the representation of women on their boards or executive teams. However, adopting targets for board membership is more common than adopting targets for executive officer positions, with 26% and 4% of the issuers having adopted such targets, respectively. 
  • Term Limits. 23% of issuers have adopted term limits for board members, which term limits varied based on age, tenure or both, a percentage that has not changed significantly since 2015 when 19% of issuers had adopted such term limits. The average tenure limit was 13 years, while the average age limit was 73 years.
  • Policies. Just over half of the issuers reviewed had adopted a policy relating to the representation of women on their boards (54%), an improvement from 15% in 2015. 

Other recent diversity initiatives

While the above findings focused on the disclosure required of TSX-listed issuers pursuant to securities regulations, public companies should also be mindful of other recent diversity initiatives and requirements:

  • CBCA Amendments. Since January 1, 2020, public companies governed by the Canada Business Corporations Act are required to report the representation of four designated groups on their boards and senior management teams: women, Indigenous peoples (First Nations, Inuit and Métis), persons with disabilities and members of visible minorities. Our review of the first year of disclosure by such corporations can be found here.
  • BlackNorth Pledge. In June 2020, the Canadian Council of Business Leaders Against Anti-Black Systemic Racism launched the BlackNorth Initiative, which challenges CEOs of Canadian companies to sign a pledge committing their organizations to specific actions and targets designed to build a more diverse and inclusive workplace and end anti-Black systemic racism. 
  • The 50-30 Challenge. The Government of Canada launched the voluntary 50-30 challenge on December 10, 2020, as a joint initiative with the private sector. Under this challenge, participating organizations across Canada will be provided with tools and resources to help them advance diversity and inclusion internally. The goals of the initiative are gender parity (50%) and significant representation (30%) of under-represented groups.
  • ISS and Glass Lewis. Both Institutional Shareholder Services (ISS) and Glass Lewis have announced amendments to their proxy voting guidelines on board gender diversity. Beginning in 2022, for S&P/TSX Composite Index issuers:
    • ISS will generally recommend voting “withhold” for the chair of the nominating committee if women comprise less than 30% of the board and there is no formal written gender diversity policy that includes a commitment to achieve at least 30% women on the board over a reasonable period.
    • Glass Lewis will generally recommend voting “withhold” for the chair or other members of the nominating committee if there are fewer than two women on the board, provided the board has seven or more total directors. (Glass Lewis’ current policy will continue to apply for boards with six or fewer directors – whereby it will generally recommend voting “withhold” if the issuer does not have any women directors.) Although Glass Lewis will not apply its new recommendation until 2022, it will start noting its concerns in this regard in 2021. 
  • Capital Markets Modernization Taskforce. The Capital Markets Modernization Taskforce published recommendations in January 2021 to modernize Ontario’s capital markets regulation, which included steps meant to increase board diversity and renewal. The taskforce recommended that issuers be required to set diversity targets for their boards and C-suites and report annually on the progress made to achieve those targets, proposing that issuers set an aggregated board and C-suite target of 50% for women and 30% for BIPOC, persons with disabilities and LGBTQ+. It also recommended a 12-year tenure limit for most board members, subject to exceptions. 

A more detailed summary of the securities regulators’ findings is set out in the CSA notice, which is accessible here.



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