4. M anaging AI Technologies Risk and Disclosure The use and development of AI technologies by issuers has unsurprisingly drawn the attention of regulators and corporate governance advocates. In late 2024, the Canadian Securities Administrators (CSA) released two staff notices that address the subject, highlighting the obligation of issuers to disclose their use or development of AI systems, and the risks to their businesses arising therefrom, if such use, development or risks are material. At the same time, the CSA has warned against the growing prevalence of “AI washing,” a practice of making overly promotional statements to capitalize on investors’ increasing interest in the technology. Proxy advisory firm Glass Lewis has amended its voting guidelines to focus on how boards are overseeing the use and development of AI systems, while the CSA has expressed its expectation that issuers should adapt their risk management procedures to account for the rapidly evolving technology. For more on this topic, refer to Managing AI Technologies (pg. 9). 5. Greenwashing: New Competition Act Provisions and CSA Warnings The growth in investor and consumer attention to environmental, social and governance (ESG) matters has invited regulatory scrutiny of the use of overly promotional and misleading environmental claims by issuers, both in their marketing to consumers and in their disclosure to investors. Businesses should expect continued scrutiny of “greenwashing” practices from the Competition Bureau and the CSA in 2025. Issuers can proactively address regulatory scrutiny by reviewing their environmental claims for vague or overly broad statements and replacing them with specific and substantiated claims. For more on this topic, refer to Greenwashing on (pg. 11).
3
Governance Insights 2025
Powered by FlippingBook