CANADA Trends and Developments Contributed by: Bill Gilliland, Dentons
For meetings on or after 1 February 2025, for companies in the S&P/TSX Composite Index, ISS continues to recommend to vote against or withhold from the Chair of the Nominating Com - mittee or Chair of the committee designated with the responsibility of a nominating committee, or the Chair of the board of directors if no nominat - ing committee has been identified or no chair of such committee has been identified, where the board has no apparent racially or ethnically diverse members. If the board has provided a formal, publicly disclosed written commitment to add at least one racially or ethnically diverse director at or prior to the next annual meeting, an exemption will be made for companies that have: • joined the S&P/TSX Composite Index and were not previously subject to the racial/eth - nic board requirement at the previous AGM; or • fallen below the minimum racial or ethnic rep - resentation on the board after achieving such level of representation at the previous AGM. Federally-incorporated issuers are required to report on diversity among the “members of sen- ior management” (as defined in the regulations). The CBCA requires CBCA-incorporated issu - ers to provide certain “prescribed information” , which includes, but is not limited to, reporting on whether the board of directors or its nominating committee have considered the level of repre - sentation in management roles of “designated groups” . The designated groups are defined as: women, indigenous peoples (First Nations, Inuit and Métis), persons with disabilities and mem - bers of visible minorities. The Employment Equity Act Review Task Force has recommended updates to modernise the Employment Equity Act (Canada) (EEA) with
respect to diversity reporting. Key changes include: • replacing the term “designated groups” with “employment equity groups” ; • introducing terms like “racialized workers” and “Indigenous peoples” ; and • creating new designated categories for Black workers and 2SLGBTQI+ workers. While no legislative changes have been pro - posed for the CBCA, the Canadian government has expressed support for these recommenda - tions and has planned consultations to modern - ise the EEA. Any amendments to the EEA could influence future CBCA diversity reporting. The consultation period regarding the recommenda - tions closed on 30 August 2024. Securities regulators in Canada continue to focus on diversity disclosure requirements. In January 2021, the Capital Markets Modernization Task - force, established by the Ontario government, issued its final report suggesting, among other things, that: • Ontario securities legislation be amended to require that Canadian public companies set goals and implement timelines for diversity amongst directors and executive manage - ment, and report annually on the levels of representation at the board and executive management of those identifying as women, BIPOC, a person with a disability or LGBTQ+; and • appropriate target levels for representation be at 50% for women and 30% for BIPOC, persons with disabilities and LGBTQ+. Additionally, on 30 October 2024, staff of the CSA published Multilateral Staff Notice 58-317 – Review of Disclosure Regarding Women on
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