Diversity and Corporate Governance - CSA Review Shows Steady, but Slow, Progress in Corporate Diversity

The Canadian Securities Administrators (CSA) have published a Staff Notice setting out the results of their fifth annual review of representation of women on boards and in executive positions. The annual review is based on disclosure required by certain reporting issuers under changes to National Instrument 58-101 - Disclosure of Corporate Governance Practices (NI 58-101) that came into force on December 31, 2014. This Staff Notice builds on the results of the CSA’s review of corporate diversity in Canada in prior years, as discussed in our October 2018 and October 2017 blog posts.

While there continues to be a general increase in the number of women holding positions as directors and in senior management, the progress remains slow. In particular, the Staff Notice sets out the following key findings:

  1. Women held 17% of board seats, as compared to 15% in 2018 and 14% in 2017;
  2. Only 5% of board chair positions are held by women;
  3. When board seats became available, 33% of these vacancies were filled by women, as compared to 29% in 2018 and 26% in 2017;
  4. 22% of issuers have now adopted targets for representation of women on their boards (up from 16% in 2018 and 11% in 2017);
  5. 50% of issuers have adopted a policy relating to the representation of women on their board, as compared to 42% in 2018 and 35% in 2017; and
  6. 73% of issuers now have at least one woman on their board (an increase from 49% in 2014).

To address the issue of gender diversity, the CSA have previously stated that they are considering implementing guidelines for corporate governance practices or changing the existing disclosure requirements. However, the CSA have not yet made a decision regarding such changes.

While the securities regulators have focused on gender diversity, the federal government has homed in on diversity in general as an important corporate governance concern. Starting January 1, 2020, as a result of amendments to the Canada Business Corporations Act (CBCA) (which we previously discussed in our May 2018 blog post), public companies, including venture issuers, governed by the CBCA will be subject to additional disclosure requirements relating to all “designated groups,” which include, in addition to women, members of visible minorities, persons with disabilities and Aboriginal peoples.

Because the disclosure requirements under both NI 58-101 and the CBCA apply a “comply or explain” model, requiring companies to either take certain actions (such as adopting a policy) or disclose why they have not done so, public companies, particularly those governed by the CBCA, may wish to consider whether adopting a diversity policy would be appropriate in their circumstances.

If you have any questions about any of the matters discussed in this publication, please contact any member of our Corporate Finance & Securities Group.


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