The Ontario Securities Commission has proposed new requirements to increase transparency regarding the representation of women on boards of directors and in senior management roles by TSX-listed and other non-venture issuers. The OSC did not propose adopting mandatory targets or quotas. However, it is clear that the intent of the proposals is to foster increased participation of women on boards and in management.

Proposed amendments to the annual disclosure under Form 58-101F1 of National Instrument 58-101 Disclosure of Corporate Governance Practices would require issuers to:

Terms Limits

  • Disclose whether or not the issuer has adopted term limits for the directors on its board.
  • If the issuer has not adopted term limits, disclose why it has not.

Policies regarding the representation of women on the board

  • Disclose whether the issuer has adopted a policy for the identification and nomination of women directors.
  • If the issuer has not adopted such a policy, disclose why it has not.
  • If an issuer has adopted such a policy, disclose
    • a short summary of its objectives and key provisions,
    • the measures taken to ensure that the policy has been implemented effectively,
    • annual and cumulative progress by the issuer on achieving the objectives of the policy, and
    • whether and, if so, how the board or its nominating committee measures the effectiveness of the policy.

Consideration of the representation of women in the director identification and selection process

  • Disclose whether and, if so, how the board or nominating committee considers the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board.
  • If the issuer does not consider the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board, disclose the issuer’s reasons for not doing so.

Consideration given to the representation of women in executive officer appointments

  • Disclose whether and, if so, how the issuer considers the level of representation of women in executive officer positions when making executive officer appointments.
  • If the issuer does not consider the level of representation of women in executive officer positions when making executive officer appointments, disclose the issuer’s reasons for not doing so.

Issuer’s targets regarding the representation of women on the board and in executive officer positions

  • Disclose whether the issuer has adopted target(s) regarding women on the issuer’s board.
  • If the issuer has not adopted such target(s), disclose why it has not.
  • Disclose whether the issuer has adopted target(s) regarding women in executive officer positions of the issuer.
  • If the issuer has not adopted such target(s), disclose why it has not.
  • If the issuer has adopted such target(s), disclose the annual and cumulative progress of the issuer in achieving its target(s).

Number of women on the board and in executive officer positions

  • Disclose the number and proportion (in percentage terms) of directors on the issuer’s board who are women.
  • Disclose the number and proportion (in percentage terms) of executive officers of the issuer, including all subsidiary entities of the issuer, who are women.

Issuers will be permitted to include other relevant information in their disclosure and incorporate information by reference to another filed document.

The proposed amendments would apply only to issuers that are reporting issuers in Ontario. However, this includes all issuers listed on the TSX.

The proposed amendments are open for comment until April 16, 2014. However, they reflect feedback received on OSC Staff Consultation Paper 58-401 Disclosure Requirements Regarding Women on Boards and in Senior Management, which was published at the request of the Government of Ontario.

The “comply-or-explain” approach taken in the proposed amendments is consistent with the existing corporate governance disclosure requirements and provides issuers with the flexibility to adopt the policies that they choose.

It will be interesting to see whether this effort will have the effect desired by the OSC, or will only result in more bolierplate disclosure. In its report accompanying the proposals, the OSC indicated that it will undertake a review of the newly mandated disclosure after 3 annual reporting periods following adoption. Accordingly, further consideration of whether more prescriptive and quantitative solutions to the underrepresentation of women are required, such as quotas as adopted in several European countries, and as advocated for by the Ontario Teachers’ Pension Plan, will likely await the results of that assessment.

Authors

Lynn M. McGrade 
LMcGrade@blg.com
416.367.6115

Alfred L. J. Page 
APage@blg.com
416.367.6020

Expertise

Securities, Capital Markets and Public Companies