On July 30, 2013, the Ontario Securities Commission (OSC) released Staff Consultation Paper 58-401 Disclosure Requirements regarding Women on Boards and in Senior Management. This follows from the Ontario government's statements regarding broader gender diversity on boards and in senior management of major businesses, not-for-profit-firms and other large organizations.

The stated focus of the consultation is advancing the representation of women on boards and in senior management. The OSC is seeking feedback from investors, issuers, other market participants and advisors on disclosure requirements.

The Consultation Paper discusses the status of women on boards and in senior management in Canada. It also summarizes the current corporate governance framework under Ontario securities legislation and the approach to gender diversity disclosure taken in other jurisdictions (including the United States, Australia, United Kingdom and several European countries). See also our September 2011 Report entitled Women on Boards on the United Kingdom, European and Canadian Initiatives.

In the Consultation Paper, the OSC put forward a model of annual disclosure requirements regarding women on boards and in senior management that would be applicable to non-venture issuers and would be included in the summary of their corporate governance practices. Venture issuers and investment funds would not be subject to the requirements.

  • Issuers would be required to provide disclosure on the following:
  • policies regarding the representation of women on the board and in senior management,
  • consideration of the representation of women in the director selection process,
  • consideration of the representation of women in the board evaluation process, and
  • measurement regarding the representation of women in the organization and specifically on the board and in senior management.

Policy Regarding the Representation of Women on the Board and in Senior Management

Under the model disclosure requirements, an issuer would disclose whether it has a policy for advancing the participation of women in senior management roles and/or for the identification and nomination of female directors. If a policy has been adopted, the issuer would:

  • provide a summary of its key provisions or disclose the policy,
  • set out how the policy is intended to advance the participation of women on the board and in senior management of the issuer,
  • explain how the policy has been implemented,
  • describe any measurable objectives that have been established under the policy,
  • disclose annual and cumulative progress by the issuer on achieving the objectives of the policy and where the objectives are measurable, disclose progress in quantitative terms, and
  • describe how the board or its nominating committee measures the effectiveness of the policy.

If the issuer does not have such a policy, it should explain why not and identify any risks or opportunity costs associated with the decision not to have such a policy.

Consideration of the Representation of Women in the Director Selection Process

Under the model disclosure requirements, an issuer would be required to indicate whether, and if so how, the board or its nomination 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 take the representation of women into account in this process, it would explain why not and identify any risks or opportunity costs associated with the decision not to do so.

Consideration of the Representation of Women in Board Evaluation

If an issuer has a policy regarding the representation of women on the board and/or in senior management, under the model disclosure requirements it also would be required to disclose whether and how adherence to the policy or achieving any objectives set out in the policy are assessed in connection with the annual evaluation of the effectiveness of the board and the nominating committee.

Disclosure of the Proportion of Women

Issuers would also be required to disclose the proportion (in percentage terms) of female employees in the whole organization, women in senior executive positions and women on the board. 

Comments on the proposals are due by September 27, 2013.  In addition, the OSC intends to host a roundtable in the fall to discuss the proposals.

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