Canadian HR Reporter Weekly

2 Canadian HR Reporter, a Thomson Reuters business 2018 CANADIAN HR REPORTER WEEKLY In a bid to boost diversity on corporate boards, the fed- eral government passed Bill C-25 on May 1 — an Act to amend the Canada Business Corporations Act (CBCA), the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act and the Competition Act. e move follows similar steps taken by the Canadian Securities Regulators and the Ontario Securities Commission a couple of years ago, and outlines requirements around diversity disclosure. Essentially, federally incorporated public companies will be subject to a "comply-and-explain" model by having to provide "prescribed information respecting diversity among the directors and among the members of senior management as defined by regulation." e diversity involves "designated groups" as defined by the Employment Equity Act, meaning women, people with disabilities, visible minorities and Indigenous peoples. Policies, targets in spotlight e proposed amendments will require disclosure on tar- get numbers and the current representation of designated groups on the board or in senior management positions, according to Stephen Robertson, a partner at Borden Lad- ner Gervais in Vancouver. e amendments will also require the disclosure of policies related to the identification, nomination and selection of designated groups for director and senior management appointments. "If they don't have such policies, they have to put out reasons why they don't have such policies, and why they don't think that's appropriate if that's part of it," he said. "It's an attempt to make people really think about this and probably have a really strong position for not doing it if they're not going to comply with it, because you're basically trying to justify that position to shareholders as to why you don't think this is an appropriate thing for you to follow along with." It's something the affected companies will have to revisit and reconsider every year, and either confirm they still believe whatever position they put forward is still accurate, or change and actually adopt those policies in the interim, said Robertson. "e theory is that shareholders, if they don't see appropriate action or feel different actions should be taken, they would be providing a message through their votes," he said. "(With Bill C-25), if you get a majority of withholding votes, that actually counts as 'against,' effectively, so there is more of a threat of a withhold vote being a potential non-election. So the need to be responsive to your shareholders is critical and just as important if not more important now that it was before. And you might be seeing that message come across for entities that aren't doing their disclosure properly or not complying fully with the intent of the regime." Affected employers will be required to disclose if they have a policy and if not, why not, according to John Kuzyk, a partner at Blakes in Toronto. Also, they will need to outline how they determine if the policy is effective and what diversity targets they have, along with providing the percentages of people from the designated groups in board and executive office positions. "e policy rationale or thought behind it is that by forcing people to explain whether or not they have a policy, you may impel people to have a policy, particularly if their shareholders — remember the disclosure is really aimed at the shareholders — feel that that is important," he said. Feds step in to boost board diversity Bill C-25 uses 'comply-and-explain' model to put pressure on companies BY SARAH DOBSON Sign up for the Canadian HR Newswire today for free and enjoy great content from the publishers of Canadian HR Reporter. HR News at Your Fingertips THE LATEST NEWS THE BEST COMMENTARY DELIVERED WEEKLY FOR READING ON ANY DEVICE Visit www.hrreporter.com/ canadian-hr-newswire

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