New “comply or explain” diversity disclosures required for Canadian firms
The Canadian Securities Administrators released new rules which require TSX-listed companies to follow new diversity disclosure rules. These “comply or explain rules” will apply to proxy circulars filed after December 31, 2014.
The “comply or explain” model, also adopted in Australia, requires a company to either (a) comply and adopt and disclose the content of the necessary policies or make and describe the necessary considerations, or else (b) explain why it does not have such policies or make such considerations.
The Canadian rules require companies to provide disclosures regarding six matters annually in the proxy circular sent in connection with an annual general meeting:
- director term limits and other mechanisms of renewal of the board;
- the number of women on the board and in executive officer positions;
- targets regarding the representation of women on the board and in executive officer positions;
- policies regarding the representation of women on the board;
- the board’s or committee’s consideration representation of women in the director identification and selection process;
- the issuer’s consideration of the representation of women in executive officer positions when making executive officer appointments.
