On September 14, 2016, the Alberta Securities Commission (ASC) published for comment proposed amendments to National Instrument 58-101 – Disclosure of Corporate Governance Practices and Form 8-101F1 – Corporate Governance Disclosure that establish disclosure requirements regarding the representation of women on boards of directors and in executive officer positions of non-venture issuers as well as with respect to term limits or other mechanisms of board renewal for board directors (Proposed Amendments).
The Proposed Amendments were previously adopted by the securities regulators of all of the other provinces and territories of Canada, other than British Columbia and Prince Edward Island, and came into effect in those jurisdictions on December 31, 2014. For further information, see our previous Blakes Bulletins:
- June 2016: Are Mandatory Gender Diversity Targets Coming for Public Companies in Ontario?
- October 2015: CSA Findings from Gender Diversity Disclosure Requirements Review Released
- October 2014: Just in Time for 2015 Proxy Season: Disclosure Requirements for Gender Diversity, Director Tenure
- January 2014: OSC Proposes Disclosure Requirements for Gender Diversity and Director Term Limits
- September 2013:
OSC Consultation Paper on Women on Boards and in Senior
Management
The ASC had not initially adopted the Proposed Amendments because it was not persuaded that the composition of board and senior management teams, from a gender diversity perspective, fell within its mandate. However, the ASC said it is now proposing to adopt the Proposed Amendments given that it has been revealed that the Proposed Amendments' objective is to "increase transparency for investors and other stakeholders regarding the representation of women on boards and in executive officer positions" and to "assist investors when making investment and voting decisions". In addition, the ASC indicates that the new Minister of Finance and President of Treasury Board had encouraged it to reconsider its position.
The Proposed Amendments, as we further described when they were adopted by Ontario and certain other jurisdictions in 2014, require issuers, other than venture issuers and investment funds, to provide disclosure on an annual basis regarding the representation of women on boards and in executive positions using a "comply or explain" approach, but do not contain any mandatory gender diversity targets or other affirmative steps to increase gender diversity at the board or executive management level. Given that the vast majority of Alberta issuers who would become subject to the Proposed Amendments through the ASC's adoption are already subject to them by virtue of being reporting issuers in Ontario, we anticipate few practical implications if the Proposed Amendments are adopted in Alberta in their current form.
Recent developments suggest that Ontario may have already started moving towards imposing gender diversity targets, given the failure of the "comply or explain" approach to measurably impact the diversity of issuer boards. In coming late to the game, the ASC has the opportunity to learn from the experiences of Ontario and the other provinces that initially adopted the Proposed Amendments. As of yet though, the ASC has merely indicated a desire to follow these other jurisdictions and conform its requirements with those existing in other jurisdictions.
The ASC anticipates having the Proposed Amendments in place for the 2017 proxy season if the comment process does not lead to any material changes. Comments are due by October 14, 2016.
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