OSC pushing companies for greater transparency about women on boards

The Ontario Securities Commission has issued proposed amendments and is asking for comment on changes that would demand greater transparency regarding representation of women on corporate boards and in senior management.

If adopted, the proposed amendments will require TSX-listed and other non-venture issuers reporting in Ontario to include the following disclosure annually in their proxy circulars:
  • Director term limits or an explanation for their absence.
  • The number and proportion of women on the board and in executive positions.
  • An issuer’s policies on the representation of women on the board (including for identifying and nominating female directors), or an explanation for their absence.
  • If a policy has been adopted, disclosure of its objectives and key provisions, the measures taken to ensure its implementation, the progress made on achieving objectives, and whether (and how) the effectiveness of the policy is measured.
  • The board’s consideration of the representation of women in the director identification and selection process, or an explanation of the absence of such consideration, including whether it considers the level of female representation on boards in identifying and nominating candidates and, if not, why not.
  • The consideration given to the representation of women in executive positions when making appointments, or an explanation of the absence of such consideration.
  • Targets voluntarily adopted regarding female representation on the board or in executive positions and, if none, an explanation for their absence.
The OSC’s approach is viewed by some as preferable to mandatory quotas or targets since hard and fast rules might result in one-size-fits all approach that doesn’t work.

“In my view the proposal is consistent with the Canadian approach to corporate governance matters generally, and I do believe that if it is adopted, the benefits will come over time,” says Lynn Korbak, general counsel and corporate secretary with TSX-listed Morneau Shepell Ltd.

Korbak acknowledges a more gradual “evolutionary” approach may increase executive participation by women in Canada at a slower pace than a mandatory quota would, but the “comply or explain” approach provides an opportunity for companies to consider their rationale on the subject, which can lead to developing a more strategic approach.

“This improves the chances for making a lasting impact to the advancement of women and diversity in business and the appreciation by Canadian business leaders and investors overall that it just makes good business sense,” she says.

Comments to the OSC on the amendments are due April 16.

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