CSA Multilateral Staff Notice 58-313 Review of Disclosure Regarding Women on Boards and in Executive Officer Positions   Year 7 Report

 

 

November 4, 2021

 

 

 

 

 

Highlights of review findings at a glance

 

Board seats

 

Executive officer positions

 

Policies and targets

 

Term limits

Disclosure review

 

Purpose of report

 

This report outlines key findings from a recent review of public disclosure regarding women on boards and in executive officer positions as required by Form 58-101F1 Corporate Governance Disclosure of National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101).  This is the seventh consecutive annual review of this disclosure that we have conducted.[1]  The review was completed primarily for the purposes of identifying key trends. A qualitative assessment of compliance with the disclosure requirements was not conducted. 

 

Disclosure requirements

 

Subject to certain exceptions[2], issuers listed on the Toronto Stock Exchange (TSX) and other non-venture issuers are required to provide disclosure on an annual basis in the following five areas:

 

 

 

The objective of the disclosure requirements is to increase transparency for investors and other stakeholders regarding the representation of women on boards and in executive officer positions, and the approach that issuers take in respect of such representation. 

 

 

 

 

 

Review sample

 

As of May 31, 2021, approximately 1,692 issuers were listed on the TSX, of which approximately 776 were subject to the disclosure requirements.  The data summarized in this report is based on a review sample of 599 issuers that had year-ends between December 31, 2020 and March 31, 2021 (Year 7) and filed information circulars or annual information forms by July 31, 2021.  A breakdown of the issuers in the review sample by market capitalization and industry is set out in Annex A.

 

 

 

Year-over-year comparison of key trends

 

The following is a snapshot of the year-over-year comparison of the key trends identified in our reviews[3]:

Trends[4]	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7
Board representation
Total board seats occupied by women	11%	12%	14%	15%	17%	20%	22%
Chairs of the board who are women	--	--	--	--	5%	6%	6%
Board vacancies filled by women	--	--	26%	29%	33%	30%	35%
Issuers with at least one woman on their board	49%	55%	61%	66%	73%	79%	82%
Issuers with three or more women on their board	8%	10%	11%	13%	15%	20%	24%
Board seats occupied by women for issuers with < $1 billion market capitalization	8%	9%	10%	11%	13%	15%	16%
Board seats occupied by women for issuers with $1-2 billion market capitalization	11%	13%	17%	19%	20%	24%	24%
Board seats occupied by women for issuers with $2-10 billion market capitalization	17%	18%	18%	21%	23%	26%	28%
Board seats occupied by women for issuers with over $10 billion market capitalization	21%	23%	24%	25%	27%	31%	30%

 

 

 

Trends[5]	Year 1	Year 2		Year 3		Year 4		Year 5		Year 6		Year 7
Executive officers
Issuers with at least one woman in an executive officer position[6]	60%	59%		62%		66%		64%		65%		67%
Issuers with a woman CEO	--	--		--		4%		4%		5%		5%
Issuers with a woman CFO	--	--		--		14%		15%		15%		17%
Policies
Issuers that adopted a policy relating to the representation of women on their board	15%	21%		35%		42%		50%		54%		60%
Targets
Issuers that adopted targets for the representation of women on their board	7%	9%	11%		16%		22%		26%		32%
Issuers that adopted targets for the representation of women in executive officer positions5	2%	2%	3%		4%		3%		4%		6%
Term limits
Issuers that adopted director term limits	19%	20%	21%		21%		21%		23%		23%

 

 

Board seat findings

 

The percentage of board seats held by women increased from 11% in year 1 to 22% in year 7.

 

 

This year, 665 board seats were vacated during the year and 555 of those seats were filled. Of those filled seats, approximately 35% (197 seats) were filled by women which represents a 5% increase over year 6.
 

 

 

Other notable findings

 

Variation among industries

 

The number of women on boards varied by industry. The manufacturing, retail and utilities industries had the highest percentage of issuers with one or more women on their boards. [7]  The biotechnology, technology and  mining industries had the lowest percentage of issuers with one or more women on their boards.

Refer to Annex B for a year-over-year comparison of the percentage of issuers with one or more women on their boards by industry.

 

 

The number of women in executive officer positions also varied by industry. The retail, biotechnology, real estate and utilities industries had the highest percentage of issuers with one or more women in executive officer positions. The technology, mining and oil & gas industries had the lowest percentage of issuers with one or more women in executive officer positions.

Refer to Annex C for a year-over-year comparison of the percentage of issuers with one or more women in executive officer positions by industry.

 

 

Diversity measures and board seats held by women

 

There was a correlation between issuers adopting certain diversity measures and the proportion of board seats held by women.

     


    

 

Term limits

 

Of the 23% of issuers we reviewed that had adopted director term limits, 41% adopted age limits alone, 29% adopted tenure limits alone, and 30% adopted both age and tenure limits. 

 

Issuers that adopted term limits had an average of 28% of women on their boards, compared to 19% for issuers with no term limits.

 

 

Guidance Related to Disclosure Practices

 

During our review, we noted that issuers generally provide disclosure addressing the disclosure requirements in different ways.  As a result of this, the format and content of disclosure may vary from issuer to issuer.  It may also be difficult to locate the relevant disclosure within an information circular and it may be difficult to interpret some of the disclosure. 

 

In order to address this, issuers should consider presenting data related to the disclosure requirements in a common format. This would improve consistency and comparability and help investors identify and evaluate the relevant disclosure in an efficient manner.

 

The following is an illustrative example of a format that issuers could use in their information circulars (or other applicable disclosure documents) to provide certain data responsive to the disclosure requirements. We have inserted data (or responses) as illustrations only.

 

Data regarding women on boards and in executive officer positions

 

Item 15 of Form 58-101F1 requires an issuer to disclose:

the number and proportion (in percentage terms) of directors on the issuer's board who are women.

the number and proportion (in percentage terms) of executive officers of the issuer, including all major subsidiaries of the issuer, who are women.

 

This information could be presented as follows (with data included below as an illustration).

 

	[insert year]
	Number	%
Women on board of directors	3	30%
Women in executive officer positions	3	37.5%

 

Information regarding targets

 

Item 14 of Form 58-101F1 requires an issuer to disclose:

•         whether the issuer has adopted a target regarding women on the issuer's board,

•         whether the issuer has adopted a target regarding women in executive officer positions of the issuer.

 

A “target” means a number or percentage, or a range of numbers or percentages, adopted by the issuer of women on the issuer's board or in executive officer positions of the issuer by a specific date.

 

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:

•         the target, and

•         the annual and cumulative progress of the issuer in achieving the target.

 

This information could be presented as follows (with data and information included below as an illustration).

 

	Target		Specific date for achievement of target	Progress in achieving target
	Number	%
Board of directors	N/A	30%	2023	The target has not yet been achieved. Women represent 20% of the directors as of the date of the circular.
Executive officer positions	N/A	N/A	N/A	N/A

 

If the issuer has not adopted a target, it must include an explanation for why it has not done so.

 

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 the directors on its board 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, disclose why it has not done so. 

 

This information could be presented as follows (with data and information included below as an illustration).

 

Director Term Limits		Other Mechanisms for Board Renewal
Age Limit	Tenure Limit
No	Yes – 12 years	No other mechanisms for board renewal adopted.

 

 

 

 

Questions

If you have any questions regarding this report, please contact:

 

Jo-Anne Matear

☏ 416-593-2323

📧 jmatear@osc.gov.on.ca

 

Leslie Milroy

☏ 416-596-4272

📧 lmilroy@osc.gov.on.ca

Jonathan Blackwell

☏ 416-593-8138 

📧 jblackwell@osc.gov.on.ca

 

Aisha Suleman

☏ 416-593-2324

📧 asuleman@osc.gov.on.ca

 

Rebecca Moen

☏ 403-297-4846

📧 rebecca.moen@asc.ca

Jennifer Smith

☏ 403-355-3898

📧 jennifer.smith@asc.ca

 

Heather Kuchuran

☏ 306-787-1009

📧 heather.kuchuran@gov.sk.ca

Wayne Bridgeman

☏ 204-945-4905

📧 wayne.bridgeman@gov.mb.ca

 

Martin Latulippe

☏ 514-395-0337, ext.4331

📧 martin.latulippe@lautorite.qc.ca

 

Ella-Jane Loomis

☏ 506-453-6591

📧 ella-jane.loomis@fcnb.ca

 

Valerie Tracy

☏ 902-424-5718

📧 valerie.tracy@novascotia.ca

Annex A  

Annex B

The following is a year-over-year comparison of the percentage of issuers with at least one woman on their board by industry:

 

Industry	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7
Biotechnology	65%	57%	56%	56%	67%	59%	64%
Financial Services	59%	67%	60%	61%	73%	77%	85%
Manufacturing	60%	68%	84%	89%	93%	93%	95%
Mining	35%	38%	54%	59%	62%	72%	78%
Oil & Gas	40%	40%	45%	56%	70%	73%	81%
Real Estate	64%	66%	59%	73%	80%	90%	89%
Retail	78%	79%	89%	84%	86%	91%	94%
Technology	39%	52%	52%	68%	73%	84%	74%
Utilities	86%	82%	86%	81%	85%	87%	90%

 

Annex C

The following is a year-over-year comparison of the percentage of issuers with at least one woman in an executive officer position by industry:

 

Industry	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7
Biotechnology	48%	66%	71%	64%	61%	73%	82%
Financial Services	64%	63%	66%	71%	76%	71%	74%
Manufacturing	61%	81%	79%	80%	70%	74%	76%
Mining	52%	49%	52%	56%	52%	52%	57%
Oil & Gas	49%	46%	48%	53%	54%	58%	58%
Real Estate	76%	76%	80%	80%	83%	79%	79%
Retail	82%	71%	68%	76%	80%	78%	88%
Technology	45%	44%	59%	52%	55%	68%	55%
Utilities	65%	73%	67%	75%	70%	75%	79%