OSC Proposes Disclosure Requirements Regarding Women on Boards and in Senior Management

by Bennett Jones LLP

On July 30, 2013, the Ontario Securities Commission (OSC), released its proposal to require TSX-listed companies to provide disclosure with respect to women on boards and in senior management as set out in the OSC Staff Consultation Paper 58-401 – Disclosure Requirements Regarding Women on Boards and in Senior Management.

The OSC proposes to implement a "comply or explain" disclosure regime that would require reporting issuers (other than issuers listed on the TSX Venture Exchange and investment funds) to develop and disclose gender diversity policies and practices as part of their annual corporate governance disclosure, or else explain why they have not implemented such policies and practices.

The consultation paper is aimed at advancing the representation of women on boards and in senior management of reporting issuers, and comes after the release of several private reports and surveys which found that the representation of women holding those positions in Canadian public companies has stagnated in recent years and lags behind international standards.1 The OSC proposal does not contemplate imposing or requiring gender quotas or targets.

A copy of the OSC's consultation paper may be found on the OSC's website at www.osc.gov.on.ca/documents/en/Securities-Category5/sn_20130730_58-401_disclosure-requirements-women.pdf.

Background for the Proposal

The Ontario Government highlighted gender diversity as a priority in its May 2013 Budget and indicated that it would enlist the OSC’s help in considering measures to increase the participation of women on boards and in senior management through mandated disclosure. In response, OSC Staff Consultation Paper 58-401 – Disclosure Requirements Regarding Women on Boards and in Senior Management was released.

The OSC consultation paper seeks feedback on a proposal to amend National Instrument 58-101 – Disclosure of Corporate Governance Practices to implement gender diversity disclosure requirements for Ontario reporting issuers (other than issuers listed on the TSX Venture Exchange and investment funds). The consultation paper sets out a possible model for disclosure and seeks more general input both on how best to advance the representation of women on boards and in senior management and the role that the OSC could play in encouraging this.

Proposed Model of Disclosure Requirements Regarding Women on Boards and in Senior Management

The current corporate governance framework contained in Canadian securities legislation does not provide guidelines or requirements addressing gender diversity or the representation of women on boards and in senior management.2

If the OSC's proposal is adopted, it would require issuers listed on the TSX (and other non-venture issuers) to provide disclosure of their gender diversity efforts as part of the annual discussion of their corporate governance practices. This approach is similar to the approach taken by Canadian securities regulators in respect of disclosure for other corporate governance practices.

In particular, the amendment would require non-venture issuers (other than investment funds) to provide annual disclosure on the following areas:

  • policies regarding the representation of women on their boards and in senior management positions, including any measurable objectives that have been established and achieved under such policies;
  • consideration of the level of representation of women on the board of directors in identifying and nominating candidates for election or re-election to the board;
  • consideration of the level of representation of women on the board and in senior management in the annual board evaluation process; and
  • quantitative information regarding the proportion of women in the organization, in senior management positions and on the board of directors of the issuer.

The OSC is not, at present, considering gender diversity disclosure requirements for issuers listed on the TSX Venture Exchange due to concerns about the potential regulatory burden such requirements may place on such issuers.

The consultation paper reviews the approaches to gender diversity disclosure applied in other countries and presents a model of corporate governance disclosure seeking to advance the participation of women in senior management and directorial roles. The OSC's proposal for a "comply or explain" model of disclosure, is similar to the approach used in Australia and would allow companies to voluntarily comply with the gender diversity disclosure regime. The proposal requires non-compliant companies to provide their reasons for not complying and identify any risks or costs associated with the company's decision not to have gender diversity policies and practices in place. Quotas and targets would not be set by the securities regulatory authorities.

Next Steps

The OSC's 60-day comment period closes on September 27, 2013, and Bennett Jones is able to assist clients in submitting their comments on the OSC's proposal. Following the closing of the comment period for the consultation paper on September 27, 2013, the OSC also intends to hold a forum in the fall to engage the various stakeholders affected by the proposed disclosure amendments.

While the purpose of the consultation paper is to elicit feedback from market participants and professional advisors, the OSC's recommendations are expected to influence the development of policy and securities legislation and rules in the future. As such, after the consultation process is complete, the OSC may issue a new rule or amendments to existing corporate governance practices. The consultation paper suggests that new rules may be implemented in the fall of 2013. TSX-listed issuers should be aware of the potential for increased disclosure requirements for gender diversity, as well as any costs of implementing policies and practices to comply with the additional requirements, or of explaining why such policies and practices are not in place.


  1. OSC Staff Consultation Paper 58-401 – Disclosure Requirements Regarding Women on Boards and in Senior Management (July 30, 2013), at 3.
  2. The corporate governance framework is currently comprised of National Policy 58-201 – Corporate Governance Guidelines, which provides non-compulsory guidelines for corporate governance practices of reporting issuers, and National Instrument 58-101 – Disclosure of Corporate Governance Practices, which provides corporate governance disclosure requirements depending on the listing status of a reporting issuer.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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