Expanded Diversity Disclosure Requirements In 2020 Under The CBCA

Author:Mr Charles Malone and Melissa Smith
Profession:Borden Ladner Gervais LLP
 
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Beginning on January 1, 2020, all public corporations incorporated under the Canada Business Corporations Act (the CBCA) will be subject to expanded diversity disclosure requirements. These new requirements go well beyond the current diversity disclosure requirements regarding women on boards under National Instrument 58-101 Disclosure of Corporate Governance Practices and Form 58-101F1 Corporate Governance Disclosure (the Current Securities Law Regime). To comply with these new requirements, federally incorporated public companies (including venture issuers) will be required to provide specific information about internal policies and board representation to shareholders either by sending along with the notice of meeting or by making this available with the proxy circular at their next annual meeting held on or after January 1, 2020. This information must also be sent to the Canadian Ministry of Industry.

Legislative Background

On May 1, 2018, Bill C-25, "An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act and the Competition Act" received royal assent.1 On June 22, 2019, an order in council set January 1, 2020 as the day that these new expanded disclosure requirements would come into force. The accompanying regulations were published in the Canada Gazette, Part II on July 10, 2019.

Scope

The new amendments expand on the Current Securities Law Regime and its "comply or explain" framework on implementing board diversity policies. Venture issuers, such as those not listed on the TSX, are also subject to the new amendments. Until now, venture issuers were exempted from disclosing any gender diversity information under the Current Securities Law Regime.

The new disclosure requirements provide that starting with their 2020 annual shareholder meetings, federally incorporated public companies must present information to their shareholders about their policies on "designated groups", as the term is defined under the Employment Equity Act (Canada). The Employment Equity Act defines "designated groups" as being: persons with disabilities, members of visible minorities, women, and Aboriginal peoples.

Information Required as Part of Disclosure

Under the new amendments, federally incorporated public companies must present information to their shareholders on the following:

Whether the corporation has a written policy relating to the identification and nomination of directors from...

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