Women on Boards and in Senior Management- OSC Releases Proposed Amendments Regarding Incremental Disclosures of Corporate Governance Practices

by Bennett Jones LLP

Women on Boards and in Senior Management

The Ontario Securities Commission (OSC) has published for comment proposed amendments to Form 58-101F1 of National Instrument 58-101 Disclosure of Corporate Governance Practices. The amended "comply or explain" disclosure regime would require issuers listed on the Toronto Stock Exchange and certain other non-venture issuers who are reporting issuers in Ontario to annually disclose any director term limits and various details about policies or lack of policies adopted by them relating to the representation of women on boards and in executive officer positions.

The OSC has indicated the proposed amendments are intended to improve the effectiveness of boards as well as corporate decision making by requiring greater transparency for investors and other stakeholders regarding the representation of women on boards and in senior management positions of TSX-listed and other non-venture issuers.


In May 2013, the Ontario Government delivered its budget which included a statement indicating the government's strong support for broader gender diversity on boards and in senior management of major businesses and other organizations. The government subsequently requested that the OSC undertake a review and public consultation process regarding disclosure requirements for women on boards and in executive positions.

In July 2013, OSC staff published OSC Staff Consultation Paper 58-401 Disclosure Requirements Regarding Women on Boards and in Senior Management. The Consultation Paper introduced for public commentary a "comply or explain" disclosure regime that would allow issuers to either develop and disclose gender diversity policies and practices, or explain why they have not implemented such policies and practices, in their annual proxy circulars or annual information form, as applicable. In October 2013, the OSC held a public roundtable to discuss the model of corporate governance disclosure set out in the Consultation Paper.

The Consultation Paper was previously discussed by Bennett Jones in OSC Proposes Disclosure Requirements Regarding Women on Boards and in Senior Management.

The Proposed Amendments

The proposed amendments follow a "comply or explain" approach as outlined in the Consultation Paper. Although the proposed amendments do not prescribe mandatory quotas or targets for women on boards and in executive positions, they require issuers that have not implemented such policies and practices to explain why they have not done so.

If implemented, the proposed amendments will require TSX-listed and certain other non-venture issuers who are reporting issuers in Ontario to include the following disclosure annually in their proxy circulars or annual information forms, as applicable:

  • whether there are any director term limits or an explanation for the absence of such limits;
  • the details of any policies regarding the identification and nomination of women directors or an explanation for the absence of such policies;
  • the board's or nominating committee's consideration of the representation of women in the director identification and selection process or an explanation for the absence of such consideration;
  • the consideration given to the representation of women in executive officer positions when making executive officer appointments or an explanation for the absence of such consideration;
  • targets (number or percentage) adopted regarding the representation of women on the board and in executive officer positions or an explanation for the absence of such targets; and
  • the number and proportion of women on the board and in executive officer positions.

Next Steps

The OSC's comment period closes on April 16, 2014, and Bennett Jones is able to assist clients in submitting their comments on the proposed amendments.

Several private reports and surveys have found that the representation of women on boards and in senior management roles in Canadian public companies has stagnated in recent years and lags behind international standards. As a result, we expect that the OSC will adopt the proposed amendments, or a variation thereof. The proposed amendments will not be adopted in time for the 2014 proxy season, but TSX-listed issuers (and non-venture issuers who are reporting issuers in Ontario) should be aware that in the future they are likely to incur additional costs and management time in implementing new policies and practices, amending current policies and practices, or providing an explanation for not doing so, and disclosing descriptions of such policies, practices or explanations in their annual proxy circulars or annual information form, as applicable.

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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