CANADA Law and Practice Contributed by: Sarah Gingrich, Sean Stevens, Tracy Hooey and Marie-Josée Neveu, Fasken
Forms and Governance Requirements ) available in Canada, the majority of Canadian public compa - nies are incorporated under the CBCA. This makes the CBCA the most relevant Canadian corporations statute when discussing the corporate governance of Canadian public companies. Regarding securi - ties laws, Canada does not have a national securi - ties regulator similar to the Securities and Exchange Commission (SEC) in the United States. Instead, each province and territory generally has its own securities statutes and securities regulators. That said, there is significant harmonisation among these various securi - ties laws, including further to the work of the Canadian Securities Administrators (CSA), which is an umbrella organisation of Canada’s provincial and territorial securities regulators whose mandate is to improve, co-ordinate and synchronise the regulation of Cana - dian capital markets. The two principal Canadian stock exchanges are the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV) and each of these has listing rules. However, these rules do not factor prominently with regard to corporate governance matters, which are generally left to Canadian corporate law and securi - ties law. 1.4 Stock Exchange Requirements Developments In late 2025, the CSA announced a pilot project to allow eligible venture issuers to voluntarily adopt semi- annual financial reporting. The pilot went live in March 2026, and is a departure from the long-standing rule that Canadian public companies must file financial statements and management’s discussion and analy - sis (MD&A) on a quarterly basis. The pilot project fol - lows similar developments in the United States, which has stated it intends to make semi-annual reporting available to all public companies, regardless of size. Should this occur, the CSA could face pressure to similarly expand semi-annual reporting eligibility to all reporting issuers in Canada. In early 2023, the CSA published a proposed rule that would require enhanced disclosure from non-venture issuers regarding how the issuers identify and evalu - ate new board candidates and how diversity is incor -
porated into those considerations. In particular, the CSA sought input on: • whether the enhanced regime should require spe - cific disclosure with respect to Indigenous Peoples, LGBTQ2SI+ persons, racialised persons, persons with disabilities, or women; or • whether the specific disclosure should be limited to women on a company’s board and allow for voluntary disclosure with respect to other under- represented groups. In April 2025, the CSA announced it was pausing this initiative to focus on (i) supporting Canadian markets and issuers as they adapt to recent developments in the global and geopolitical landscape (ie, trade and tariff uncertainty); and (ii) initiatives to make Canadian capital markets more competitive, efficient and resil - ient. However, the CSA also stated it may revisit the initiative in the future. The management of Canadian companies is princi - pally conducted by the CEO, CFO and other members of the executive management team. The authority of management is as delegated to management by the board of directors. Best practice in Canada is for the board to devise a formal mandate for itself together with an associated delegation of authority to manage - ment. 2.2 Types of Decisions Best practice in Canadian corporate governance is for shorter term and general operational decision-making to be delegated by the board to management and for the board to retain authority over longer term and “bigger picture” issues. Matters over which the board retains authority are often allocated to board com - mittees. Audit committees are required at Canadian public companies. The committee must be composed of a minimum of three members and, subject to limited exceptions, each member must be independent. 2. Corporate Management 2.1 Principal Bodies or Functions
130 CHAMBERS.COM
Powered by FlippingBook