Written By Denise Bright, Kristopher Hanc, William Osler and Lisa Stewart

The Canadian Securities Administrators (CSA) has published the seventh annual Review of Disclosure Regarding Women on Boards and in Executive Officer Positions. The participating jurisdictions from the previous report—Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan—were joined in publishing the Review by Newfoundland and Labrador, Northwest Territories, Nunavut and Yukon.

The Review summarizes findings from the corporate governance disclosures of 599 TSX-listed issuers. The notice also outlines new guidance that recommends issuers present certain data related to representation, targets and term limits in a common tabular format to make it easier for investors to identify and evaluate the information.

Key Findings

Board Seats and Executive Officer Positions

There is continued progress in a number of areas for women on boards. In the Year 7 Review, 22 percent of total board seats are occupied by women, double the percentage from 2015. 82 percent of issuers now have at least one woman on their board, a 33 percent increase from seven years ago. 35 percent of board vacancies were filled by women, up 5 percent from the previous year. However, only six percent of boards have women as chairs, unchanged from Year 6.

Issuers with higher market capitalization continue to have more women on their boards and the trends have been positive in all categories. Companies with over $10 billion in market cap have 30 percent of board seats occupied by women. This is up from 21 percent in Year 1, although down by a percentage point from last year.

67 percent of issuers have at least one woman in an executive officer position. However, only five percent have a woman as CEO (no change from the Year 6 Review).

Industry Breakdown

The manufacturing, retail and utilities industries had the highest percentage of issuers with one or more women on their boards. Mining, technology and biotechnology had the lowest. Manufacturing and retail also led the way in the previous Review. Financial services and oil & gas had the biggest year-over-year increases in women on boards at eight percent each. Technology fell the most at 10 percent, but has nearly doubled its total in the past seven years. Oil & gas and mining have more than twice the percentage of one or more women on their boards than in 2015.

The number of women in executive officer positions also varied by industry in the latest Review. The retail, biotechnology, real estate and utilities industries took the top three spots (with a two-way tie for third). Oil & gas, mining and technology are in the bottom three. The biotechnology sector has improved the most since Year 1—climbing from 48 percent to 82 percent today.

Policies, Targets and Term Limits

The Year 7 Review reported that:

• 60 percent of issuers have adopted a policy relating to the representation of women on their boards—a 45 per cent increase since the existing framework was adopted in 2014.
• Issuers that adopted a written policy—and issuers who set targets for the representation of women on their boards—tended to have a greater proportion of board seats held by women.
• Issuers that adopted term limits had an average of 28 percent of women on their boards, compared to 19 percent for issuers with no term limits.

New Guidance on Disclosure Practices

The CSA notes that throughout their review periods issuers had presented their disclosure requirements in different ways. To avoid inconsistencies in content, the CSA recommends that issuers follow the following format in order to improve comparability and help investors evaluate the relevant disclosure in an efficient manner.

Boards and Executive Officer Positions

When disclosing data regarding women on boards and in executive officer positions (Item 15 of Form 58-101F1 Corporate Governance Disclosure), issuers are required to disclose the number and proportion (in percentage terms) of (i) directors on the issuer's board who are women; and (ii) executive officers of the issuer, including all major subsidiaries of the issuer, who are women.

The information could be presented in the following format (data below is an illustration only):

Targets

When disclosing information regarding targets (Item 14 of Form 58-101F1), issuers are required to disclose whether they have adopted a target regarding (i) women on the issuer's board of directors; and (ii) women in executive officer positions of the issuer.

If the issuer has not adopted these targets, it must disclose why it has not done so. If the issuer has adopted a target, it must disclose (i) the target: and (ii) the annual and cumulative progress of the issuer in achieving the target.

The information could be presented in the following format (data and information below are an illustration only):

Term Limits and Board Renewal

When disclosing information regarding terms limits and other mechanisms of board renewal, Item 10 of Form 58-101F1 requires an issuer to disclose whether or not the issuer has adopted term limits for directors or other mechanisms of board renewal and if so, include a description of those director term limits or other mechanisms of board renewal. If the issuer has not adopted director term limits or other mechanisms of board renewal, it is required to disclose why it has not done so.

The information could be presented in the following format (data and information below are an illustration only):

If you have any questions about the new guidance, or other aspects of disclosure relating to women on boards and in executive officer positions, please contact any of the authors to discuss.

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