Canada’s federal corporate statute has also been amended to require annual diversity disclosure by public companies relating to board and senior management diversity, in regard to not only gender but also visible minorities, Indigenous peoples and persons with disabilities. Despite efforts to improve diversity in the governance of Canada’s public companies, as in many other jurisdictions around the world, progress has been slower than expected, and regulators and investors remain focused on the need for reporting issuers to make meaningful improvements in the representation of women and other under-represented groups among their leadership. Securities regulators continue to evaluate whether increased disclosure is warranted. In 2023, they requested comments on two potential approaches to enhanced diversity disclosure: one approach would permit public companies to determine their own diversity objectives and the mechanisms to achieve those objectives, and to disclose data regarding groups specified in their diversity policies. The other approach would require disclosure in a consistent tabular format on the representation in leadership of women, Indigenous peoples, racialized persons, persons with disabilities and LGBTQ2SI+ persons. National Policy 58-201 (NP58-201) sets out 18 best practices drawn from existing Canadian standards and U.S. regulatory standards. Issuers are not required to comply with the standards set out in NP58-201, but are required to disclose information about their governance practices as set out in the associated disclosure rule, NI58-101. Canadian securities regulators are also considering whether to supplement the comply-or- explain disclosure regime with additional governance guidelines in NP58-201.
Many areas of governance that are mandated in other jurisdictions, such as the composition and charter of the compensation committee and nominating and governance committee, in Canada are addressed by best practice guidelines and disclosure requirements (“comply or explain”).
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Doing Business in Canada
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