CANADA Trends and Developments Contributed by: Bill Gilliland, Dentons Canada LLP
13 April 2023, the CSA proposed amendments to Form 58-101F1 – Corporate Governance Disclosure and National Policy 58-201 – Corporate Governance Guidelines, pertaining to diversity, board renewal and board nominations. However, in April 2025, the CSA announced that it was pausing its review of stakehold - ers’ comments from the consultation period on its new approaches towards diversity disclosure, although it indicated the diversity area would be reviewed again in the future. Despite this pause, Canadian public companies remain subject to mandatory diversity disclosure requirements under the securities law, the CBCA and TSX rules. By contrast, in the United States, executive orders have been signed overturning diversity, equity and inclusion programmes in the federal government, and directing federal agencies to investigate diversity programmes at publicly traded corporations, non- profits, colleges and foundations. For Canadian issu - ers, particularly those that are dual-listed or that have significant United States operational footprints, com - pliance with Canadian mandatory diversity disclosure requirements necessarily involves reporting on diver - sity policies and programmes at a time when some United States federal regulatory bodies are actively discouraging or penalising such initiatives. As a result, many issuers have responded by becoming more cau - tious in their diversity-related communications, with recent trends indicating a move towards providing only the required disclosures, with less emphasis on voluntary, expansive statements. Transparency Beneficial ownership Recent beneficial ownership disclosure requirements are showing a trend towards increased transparency. Corporate legislation in Ontario, British Columbia, Saskatchewan, Manitoba, Quebec, Nova Scotia, PEI and Newfoundland and Labrador, and under the CBCA, was amended to provide that certain private corporations must prepare and maintain a register of individuals with “significant control” over the corpora - tion. For example, under the Business Corporations Act (Ontario) (OBCA), an individual with significant control is someone who:
• is the registered or beneficial owner of, or has direct or indirect control or direction over, any num - ber of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstand - ing voting shares; • is the registered or beneficial owner of, or has direct or indirect control or direction over, any number of shares equal to 25% or more of all of the corporation’s outstanding shares measured by fair market value; • has any direct or indirect influence that, if exer - cised, would result in control in fact of the corpora - tion; or • is an individual to whom circumstances prescribed by regulation apply. For each individual with significant control, the register must include the following information per the OBCA: • name, date of birth and last known address; • jurisdiction of residence for tax purposes; • the date on which the individual became (or ceased to be) an individual with significant control; • a description of how the individual meets the defi - nition of significant control; • any other information that may be provided for in regulations enacted in the future; and • a description of the steps taken to identify all indi - viduals with significant control and to ensure that the information in the register is accurate, complete and up to date. Say-on-pay vote Upcoming amendments to the CBCA would require the directors of prescribed corporations to annually disclose their approach to remuneration and to pro - vide shareholders with a non-binding “say-on-pay” vote. Many public companies already voluntarily pro - vide their shareholders with a “say-on-pay” vote. Proxy advisers maintain voting policies with respect to shareholder opposition to “say-on-pay” proposals and a board’s level of engagement and responsive - ness to shareholder concerns. Board matters Glass Lewis has noted the importance of companies disclosing sufficient information to allow a meaning -
142 CHAMBERS.COM
Powered by FlippingBook