Where are the women? New disclosure for TSX-listed issuers

New corporate governance disclosure requirements relating to the representation of women on boards and in senior management and director term limits were released by most of the securities regulatory authorities in Canada on Oct. 15, 2014. These amendments apply to TSX-listed and certain other non-venture issuers only and will come into effect on Dec. 31, 2014, in time for the 2015 proxy season.

Women on Boards and in Senior Management

The requirements use a “comply or explain” model and were developed with a view to increasing transparency regarding the representation of women on boards and in senior management. Where an issuer does not “comply” with the practices outlined by the securities regulatory authorities, it will need to explain “why it has not done so”. In any event, the number and proportion (in percentage terms) of directors on the board and of executive officers of the issuer (and all major subsidiaries) who are women must be disclosed. The securities regulatory authorities intend this disclosure to assist investors when making investment and voting decisions.

Briefly, here is what an issuer would need to do to “comply”:

• adopt a written policy relating to the identification and nomination of women directors;
• disclose details relating to that policy, including its implementation, progress made on achieving its objectives and measurement of its effectiveness;
• disclose how the level of representation of women is considered in the director nomination process and in making executive officer appointments; and
• adopt targets regarding women on the board and in executive officer positions and disclose these targets and the progress made on achieving them.

An issuer that is not in a position to make this disclosure in time for the 2015 proxy season will need to explain “why it has not done so”.

Director Term Limits

As a related measure, with a view to promoting board renewal and providing opportunities for women board candidates, an issuer will need to disclose whether it has adopted term limits for the directors on its board or other mechanisms for board renewal and describe them. Otherwise, it will need to explain “why it has not done so”.