Beginning on January 1, 2020, directors of a distributing corporation governed by the Canada Business Corporations Act (the CBCA) will be required to inform shareholders at every annual meeting about diversity among the directors and members of senior management of the corporation.
This new requirement, pursuant to an amended section 172.1 of the CBCA, requires certain diversity information to be sent to shareholders along with the notice of meeting or to be made available with the proxy circular. The diversity information must also be sent to the Canadian Ministry of Industry.
The CBCA defines a distributing corporation to include a reporting issuer, as well as corporations that have (i) filed a prospectus or registration statement, (ii) listed their securities on a stock exchange in or outside of Canada, or (iii) are involved in, formed from, resulting from or continued after an amalgamation, reorganization, an arrangement or a statutory procedure, if one of the participating entities is a otherwise distributing corporation.
The information that must be provided to shareholders of the distributing corporation regarding diversity is set out in the amended Canada Business Corporations Regulations, 2001 (the Regulation), and includes:
whether or not the corporation has adopted term limits for the directors on its board or other mechanisms of board renewal, together with a description of those term limits or mechanisms or the reasons why the corporation has not adopted them; whether or not the corporation has adopted a written policy relating to the identification and nomination of members of designated groups for directors and, if the corporation has not adopted a written policy, the reasons why it has not adopted such a policy; if the corporation has adopted a written policy relating to the identification and nomination of members of designated groups for directors, a short summary of the policy's objectives and key provisions, a description of the measures taken to ensure that the policy is effectively implemented, a description of the annual and cumulative progress by the corporation in achieving the objectives of the policy, and whether or not the board of directors or its nominating committee measures the effectiveness of the policy (and, if so, a description of how it is measured); whether or not the board of directors or its nominating committee considers the level of the representation of designated groups on the board in...