Seven provinces and two territories have signed onto new rules that will require listed companies to report annually on their approach to adding more women to their boards of directors and to senior management.
The amendments are geared to "increase transparency for investors" and help them make investment and voting decisions, the Ontario Securities Commission said in putting forward the rules on Wednesday.
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The securities regulatory authorities in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Québec and Saskatchewan will adopt the new rules which go into effect on Dec. 31 of this year.
The first proxy circulars next year from listed companies will have this information:
- Director term limits and a description of how the board is renewed.
- Policies regarding the representation of women on the board.
- How the board or nominating committee considers the representation of women in the director identification and selection process.
- How the company considers representation of women in filling executive officer positions.
- Company targets regarding the representation of women on the board and in executive officer positions.
- The number of women on the board and in executive officer positions.
Companies may have to scramble over the next three months to put written policies and targets in place.
Women comprised 12.2 per cent of directors in the S&P/TSX composite index in 2013, but more than 40 per cent of boards have no female representation. The new rules avoid the tricky issue of setting quotas for putting women on boards and allow companies to voluntarily make changes.
However disclosure to investors — an approach called comply and explain — makes them more accountable in their decision-making.
“We know from stakeholder and investor feedback in the participating jurisdictions that this issue is an important one, and we’ve taken steps in a coordinated fashion to broaden disclosure in this area.” OSC chair Howard Wetston said in statement.