Governance Insights 2026 A Preview of 2026: 10 Legal Updates GCs, Boards and Investors Need to Know
5. Diversity, Equity and Inclusion in a Changing Geopolitical Landscape In April 2025, the CSA announced that it was pausing its work on amendments to existing diversity disclosure requirements for Canadian issuers in response to the changing global economic and geopolitical landscape. This represented a marked shift from 2023, when the CSA announced proposed changes that would have significantly expanded Canada’s “comply-or-explain” disclosure regime in respect of DEI matters. Nonetheless, DEI obligations and governance expectations remain firmly in place for Canadian issuers. For one, Canadian senior exchange-listed issuers continue to be subject to existing securities law comply-or-explain disclosure requirements relating to gender diversity policies, targets and gender representation on boards and in executive positions, as set out in National Instrument 58- 101 – Disclosure of Corporate Governance Practices . As well, issuers incorporated under the Canada Business Corporations Act must continue to disclose both the number and percentage of individuals from designated groups, including women and visible minorities, who hold director positions or occupy roles in senior management, together with any related policies, targets and progress. In addition, proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis continue to apply voting policies that effectively require large-cap Canadian issuers to maintain boards comprising at least 30% women and, in the case of ISS, at least one racially or ethnically diverse director, or risk adverse vote recommendations against nominating committee chairs. For dual-listed issuers, or those operating in the United States or with a significant U.S. investor base, the governance challenge is now one of alignment. DEI practices must continue to meet Canadian legal standards, while being presented in public disclosures with an awareness of U.S. litigation risk, proxy scrutiny and political polarization. Canadian reporting issuers should be careful not to respond to the U.S. environment in a manner that creates new governance or legal exposure in Canada. Abrupt reversals of diversity policies can trigger human rights, employment and reputational risks, and poorly framed disclosure can invite proxy advisor criticism or shareholder proposals. The safest path forward is to provide disclosure that demonstrates thoughtful board oversight; links diversity to talent, succession and risk management; and avoids rhetoric that could be misconstrued on either side of the border. The Canadian Coalition for Good Governance (CCGG) recently released a policy statement on the topic, Navigating Board and Executive Officer Diversity Expectations in Canada: A Roadmap for Higher Performing Boards , noting that domestic and global expectations for diversity of thought and experience on Canadian boards remain robust. “This means,” the CCGG writes, “that boards should be meaningfully diverse in ways that link to the company’s operations, strategy, culture, geographic footprint, employees, customers, communities in which it does business, suppliers and other stakeholders.”
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