The Canadian Securities Administrators (CSA) has published for comment proposed amendments and changes to: (i) Form 58-101F1 Corporate Governance Disclosure (Form 58-101F1) of National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101), and (ii) National Policy 58-201 Corporate Governance Guidelines (NP 58-201) for non-venture issuers (the “Proposed Amendments and Changes”). If implemented, the Proposed Amendments and Changes would increase further transparency on board nominations, board renewal, and diversity, while retaining the current disclosure requirements with respect to women.
The comment period for the Proposed Amendments and Changes is open until July 12, 2023.
Form 58-101F1 currently requires non-venture issuers to provide annual disclosure on director term limits and procedures of board renewal, policies and consideration given for the representation of women on the board and in executive officer positions, along with targets and the current number of women on the board and in executive officer positions.
Additionally, certain legislative measures have been introduced to emphasize the importance of considering diversity on boards and in executive officer positions beyond women. For example, from January 1, 2020, the Canada Business Corporations Act (CBCA) required distributing corporations to expand their diversity disclosure to include Indigenous peoples, persons with disabilities and members of visible minorities. For further details, see our August 8, 2019 Update, CBCA Diversity Disclosure Requirements Effective for 2020 Proxy Season.
Following the CBCA amendments, CSA Staff consulted with stakeholders to better understand their perspectives with respect to diversity. While some stakeholders expressed support for a consistent and prescriptive framework for diversity disclosure, others emphasized the need for a flexible approach and expressed concern with the disclosure of personal characteristics. As a result, the CSA published the Proposed Amendments and Changes and is seeking further commentary from market participants.
Proposed Amendments and Changes
The CSA provided two versions of Form 58-101F1 for comment, being Form A and Form B. Each Form substantially maintains the existing disclosure requirements with respect to women, and is designed to provide investors with information that enables them to better understand how diversity, more broadly, is addressed by non-venture issuers.
Form A requires that the issuer describe how the board identifies and evaluates new candidates for nominations and addresses renewals and reports data on the representation of specific groups on the board and in executive officer positions, if collected. The general intent is to provide issuers with flexibility to design their own practices and policies, without a mandatory requirement to collect any specific data. This less prescriptive approach differs from the approach outlined in the CBCA, which requires disclosure for specifically identified groups of people. Securities regulators in British Columbia, Alberta, Saskatchewan, and the Northwest Territories support Form A.
Form B provides for mandatory reporting on board and executive officer representation of five designated groups: (i) women, (ii) Indigenous peoples, (iii) racialized persons, (iv) persons with disabilities, and (v) LGBTQ2SI+ persons. This approach is more consistent with the CBCA requirements, except that Form B also includes LGBTQ2SI+ persons. Under Form B, disclosure data will have to be reported in a standardized tabular format to promote consistency and comparability. The Ontario Securities Commission supports Form B.
Notably, the securities regulators in Quebec, New Brunswick, Manitoba, Nova Scotia, Newfoundland and Labrador, Nunavut, the Yukon, and Prince Edward Island have yet to express a preference as between Form A and Form B.
The proposed changes to NP 58-201 would complement the diversity disclosure requirements contained in Form 58-101F1 by providing enhanced guidelines (not prescriptive rules) for both non-venture issuers and venture issuers regarding: (i) the responsibilities of the nominating committee, (ii) the adoption of a written policy respecting the director nomination process, (iii) the use of a composition matrix (commonly referred to as a skills matrix), (iv) effective succession planning and the mechanisms of board renewal (which may include the use of term limits, effectiveness assessments and a composition matrix), (v) the adoption of a written diversity policy, and (vi) setting objectives for achieving diversity in the composition of its board and executive officer positions (which may include diversity targets, establishing a diversity council, implementing training and leadership programs, and expanding strategic outreach directed at developing a diverse pipeline of candidates for director and executive officer positions).
For further information on the Proposed Amendments and Changes, please contact any member of our Capital Markets Group.
Capital MarketsBill Gorman and Randy McAuley co-authored Access Model for prospectuses: Final amendments announced in Law360 Canada. Excerpt from Access Model for prospectuses: Final amendments…
REITS and Income SecuritiesStephen Pincus, Brenda Gosselin, and Bill Gorman have co-authored The Benefits of Canada - Cross Border and Foreign REITs in the forth edition of The Legal Reviews Canada.To…
British Columbia Securities Commission Provides Guidance on Early Warning and Joint Actor Rules in Proxy SolicitationsPrompt, robust and wide dissemination of material information is a central tenet of Canadian securities laws. The early warning disclosure requirements contained in National Instrument…
Capital MarketsMichelle Vigod, Julian Di Bartolomeo and Duncan Lurie published an article in Law360 Canada, part of LexisNexis Canada Inc.Excerpt from "Proxy advisors update Canadian voting guidelines for…
Capital MarketsOn January 11, 2024, the Canadian Securities Administrators (CSA) published the final form of amendments to securities legislation to implement an access model (the “Access Model”) for delivery of…
Capital MarketsThe Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”) came into force on January 1, 2024, implementing enhanced reporting requirements for certain companies and…
Mergers and AcquisitionsGoodmans LLP is acting for Screaming Eagle Acquisition Corp. in connection with its proposed merger with the Studio Business of Lionsgate Entertainment Corp., comprised of its Television Studio and…
Capital MarketsGoodmans LLP acted for the underwriters in connection with a public offering by StorageVault Canada Inc. (“StorageVault”) of convertible senior unsecured debentures (the “Debentures”) on a bought deal…
Capital MarketsGoodmans LLP acted for E Automotive Inc. d/b/a EINC in its non-brokered private placement offering of 4,814,100 common shares ("Shares') to Intercap Equity Inc. at a price of C$4.23 per Share for…
Capital MarketsGoodmans LLP acted for Northwest Healthcare Properties Real Estate Investment Trust (the "REIT") in connection with the renewal of its existing base shelf prospectus and filing and obtaining a receipt…
Capital MarketsGoodmans LLP acted for Northwest Healthcare Properties Real Estate Investment Trust (the "REIT") in connection with a public offering whereby the REIT sold C$135 million aggregate principal amount of…
Capital MarketsGoodmans LLP acted for the syndicate of agents led by CIBC World Markets Inc., in connection with a public offering of C$1 billion aggregate principal amount of medium-term notes of Brookfield…
News & Events
Banking and Financial ServicesWe are proud to announce Goodmans LLP has once again received top-tier recognition from Chambers and Partners in the Chambers Global 2024 Guide released today. Recognition from…
Banking and Financial ServicesWe are pleased to share Goodmans lawyers have been recognized across Who's Who Legal's National Guide: Canada 2023. WWL National Guides identify national or regional leaders in a sector, industry…
Banking and Financial ServicesWe are pleased to announce Goodmans LLP has once again received top tier recognition from The Legal 500 Canada in their 2024 Guide released today. Recognition from The Legal 500 is based on…