CSA Multilateral Staff Notice 58-310
Report on Fourth Staff Review of
Disclosure regarding Women on
Boards and in Executive Officer
Positions
September 27, 2018
EXECUTIVE SUMMARY
This report outlines key trends from a recent review of disclosure regarding women on boards and in executive officer
positions as required by Form 58-101 F1 Corporate Governance Disclosure (the disclosure requirements) of National
Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101). The review was conducted by securities
regulatory authorities in Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan. The review
was completed for the purposes of identifying key trends. A qualitative assessment of compliance with the disclosure
requirements was not conducted.
The key trends are based on a review sample of 648 issuers that had year-ends between December 31, 2017 and March 31,
2018 (year 4) and filed information circulars or annual information forms by July 31, 2018.
The following key trends were observed in this review:
Board seats
15% of board seats were held by women; however this number tended to
increase with the size of the issuer and varied by industry.
66% of issuers had at least one woman on their board, however 218 issuers had
no women on their board.
29% of vacated board seats were filled by women.
Executive officer
4% of issuers had a female CEO.
positions
14% of issuers had a female CFO.
66% of issuers had at least one woman in an executive officer position.
Targets
16% of issuers adopted targets for the representation of women on their board.
4% of issuers adopted targets for the representation of women in executive
officer positions.
Term limits and other
21% of issuers adopted some form of director term limits (alone or with other
mechanisms of board
mechanisms of board renewal).
renewal
32% of issuers adopted other mechanisms of board renewal, but did not adopt
term limits.
43% of issuers disclosed that they did not have director term limits nor had they
adopted other mechanisms of board renewal.
Policies
42% of issuers adopted a policy relating to the representation of women on their
board.
1
SNAPSHOT OF DATA
The following is a snapshot of the year-over-year comparison of the key trends identified in our reviews:
Trends
Board representation
Total board seats occupied by women
Issuers with at least one woman on their board
Issuers with three or more women on their board
Board seats occupied by women for issuers with less than $1 billion market
capitalization
Board seats occupied by women for issuers with $1-2 billion market capitalization
Board seats occupied by women for issuers with $2-10 billion market capitalization
Board seats occupied by women for issuers with over $10 billion market capitalization
Board vacancies filled by women
2
Executive officers
Issuers with at least one woman in executive officer positions
Issuers with a female CEO
3
Issuers with a female CFO
3
Policies
Issuers that adopted a policy relating to the representation of women on their board
Targets
Issuers that adopted targets for the representation of women on their board
Issuers that adopted targets for the representation of women in executive officer
positions
Term limits
Issuers that adopted director term limits
Consideration of the representation of women
Issuers that considered the representation of women on their boards as part of the
director identification and selection process
Issuers that considered the representation of women in executive officer appointments
1
Board seats occupied by women for issuers over $1 billion market capitalization: 16% (Year 1), 18% (Year 2), 20% (Year 3), and 21% (Year 4).
2
Board vacancies filled by women were not included in our reporting in Year 1 and Year 2.
3
Issuers with a female CEO and issuers with a female CFO were not included in our reporting in Year 1, Year 2 and Year 3.
2
Year 1
Year 2
Year 3
Year 4
11%
12%
14%
15%
49%
55%
61%
66%
8%
10%
11%
13%
8%
9%
10%
11%
1
11%
13%
17%
19%
1
17%
18%
18%
21%
1
21%
23%
24%
25%
--
--
26%
29%
60%
59%
62%
66%
--
--
--
4%
--
--
--
14%
15%
21%
35%
42%
7%
9%
11%
16%
2%
2%
3%
4%
19%
20%
21%
21%
60%
66%
65%
73%
53%
58%
58%
60%
KEY TRENDS
Set out below are highlights from our review related to the following:
A.
Women on boards
B.
Women in executive officer positions
C.
Board renewal
A. Women on boards
Board seats
The percentage of board seats held by women increased to 15% in year 4.
The percentage of board seats held by women varied by the size of the issuer.
For the 417 issuers with a market capitalization of less than $1 billion, 11% of board seats
were held by women.
For the 85 issuers with a market capitalization of between $1 billion and $2 billion, 19% of
board seats were held by women.
For the 99 issuers with a market capitalization of between $2 billion and $10 billion, 21% of
board seats were held by women.
For the 47 issuers with a market capitalization of greater than $10 billion, 25% of board
seats were held by women.
4
73% of issuers indicated that they considered the representation of women on their boards in
identifying and nominating candidates for election or re-election to the board.
4
Board seats occupied by women for the 231 issuers with a market capitalization of greater than $1 billion were: 16% (Year 1), 18% (Year 2), 20% (Year 3),
and 21% (Year 4).
3
Board fill rate
When board seats became available and were filled, approximately three in ten seats were filled by
women.
This year, 720 board seats were vacated during the year and 561 of those seats were filled. Of those
filled seats, 29% (165 seats) were filled by women which represents a 3% increase over year 3.
4
Issuers with no
The number of issuers with no women on their board has declined since the disclosure
women on board
requirements were introduced.
34% of issuers (218 issuers) had no women on their board.
Issuers with at
The number of issuers with at least one woman on their board has increased since the disclosure
least one woman
requirements were introduced.
on board
66% of issuers had at least one woman on their board.
5
Industry data
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.
5
The oil and gas, biotechnology and mining industries had the lowest
percentage of issuers with one or more women on their boards.
Refer to Appendix A for a year-over-year comparison of the percentage of issuers with one or more
women on their boards by industry.
5
The larger Canadian banks, which are part of an industry that has generally been an early adopter of diversity initiatives, are not captured in our reviews.
The six largest banks had an average of 38% of women on their boards based on their 2018 information circulars filed for their years ending October 31,
2017.
6
Targets
Few issuers had targets for women on their boards.
16% of issuers set targets for the representation of women on their boards.
Issuers that had adopted board targets had an average of 24% of their board seats held by women,
compared to issuers without targets that had an average of 13%.
Policies relating
42% of issuers adopted a policy on identifying and nominating women directors, representing an
to the
almost three-fold increase since year 1.
identification
and nomination
The 269 issuers that had adopted a policy relating to the representation of women on their boards
of women
had an average of 20% of women on their boards compared to issuers with no such policy, that had
directors
an average of 12%.
7
B. Women in executive officer positions
Number of women
66% of issuers had at least one woman in an executive officer position.
6
in executive officer
positions
The number of executive officers reported by issuers ranged from zero to approximately 4,000, with
most issuers having fewer than 50 executive officers.
7
4% of issuers had a female CEO.
8
14% of issuers had a female CFO.
8
60% of issuers indicated that they considered the representation of women in executive officer
positions when making executive officer appointments.
6
586 of the 648 issuers in the review sample disclosed executive officer information.
7
The numbers included in this part of the report are taken from issuers’ disclosure, and may include positions other than executive officers, as that term is
defined in NI 58-101.
8
CEO and CFO data is not a disclosure requirement.
8
Industry data
The number of women in executive officer positions varied by industry.
The manufacturing and real estate industries had the highest percentage of issuers with one or more
women in executive officer positions. The technology, oil and gas and mining industries had the
lowest percentage of issuers with one or more women in executive officer positions.
Refer to Appendix B for a year-over-year comparison of the percentage of issuers with one or more
women in executive officer positions by industry.
Targets
Targets for women in executive officer positions were rare.
4% of issuers set targets for the representation of women in executive officer positions.
9
C. Board renewal
Term limits
21% of issuers had adopted term limits (alone or with other mechanisms of board renewal).
Term limits took varied forms:
47% adopted age limits,
25% adopted tenure limits, and
28% adopted both age and tenure limits.
The average tenure and age limits were 13 years and 74 years, respectively.
Other mechanisms
32% of issuers adopted other mechanisms of board renewal, but did not adopt term limits. Some of
of board renewal
these issuers indicated that they used assessments of the board and individual directors as a
mechanism of board renewal. Other issuers indicated that they had adopted mechanisms of board
renewal other than term limits but did not describe them.
43% of issuers disclosed that they did not have director term limits nor had they adopted other
mechanisms of board renewal.
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BACKGROUND
Required
Issuers listed on the Toronto Stock Exchange (TSX) and certain other non-venture issuers are required
disclosure
to provide disclosure on an annual basis in the following five areas:
Number of women in roles – the number and percentage of women on its board of
directors (board) and in executive officer positions.
Targets – whether it has targets for the number or percentage of women on its board and in
executive officer positions, and if not, why not.
Board policy – whether it has a written policy relating to the identification and nomination
of women directors, and if not, why not.
Board renewal – whether it has director term limits or other mechanisms of board renewal,
and if not, why not.
Consideration of the representation of women – whether it considers the representation of
women in its director identification and selection process and in its executive officer
appointments, and if not, why not.
Objective
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.
Prior reviews of
This is the fourth consecutive annual review of this disclosure that we
9
have conducted. The trends
disclosure
from our first three annual reviews are set out in:
Year 1 (2015) – CSA Multilateral Staff Notice 58-307
Year 2 (2016) – CSA Multilateral Staff Notice 58-308
Year 3 (2017) – CSA Multilateral Staff Notice 58-309
9
The Alberta Securities Commission did not participate in the 2015 and 2016 reviews as the disclosure requirements had not yet been adopted in Alberta.
The British Columbia Securities Commission has not adopted the disclosure requirements and did not participate in any of the reviews. However, Alberta
based and BC-based TSX-listed issuers were included in the respective samples.
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REVIEW SAMPLE
As of May 31, 2018, approximately 1,500 issuers were listed on the TSX, of which approximately 790 were subject to the
disclosure requirements.
Scope of sample
We reviewed the disclosure of 648 issuers that had year-ends between December 31, 2017
and March 31, 2018, and filed information circulars or annual information forms by July 31,
2018.
10
Issuers excluded from our review include:
approximately 700 exchange-traded funds or closed-end funds,
issuers that moved the listing of their securities from the TSX Venture Exchange
(TSX-V) to the TSX in 2018, and
other issuers such as designated foreign issuers and SEC foreign issuers that are
exempt from the requirements of NI 58-101.
Profile of issuers in
review sample
11
7%
15%
65%
13%
>$10 Billion (47 issuers)
$2-$10 Billion (99 issuers)
$1-2 Billion (85 issuers)
<$1 Billion (417 issuers)
10
Because of the scope of our sample, our findings, and the comparisons between the current year and the prior three years provide only a partial picture.
The issuers in the current year and the prior year samples vary for several reasons including:
issuers being delisted from the TSX,
issuers’ listings of securities being moved to the TSX-V,
corporate reorganizations resulting in issuers no longer being listed on the TSX,
issuers filing information circulars after July 31, 2018,
issuers completing initial public offerings and becoming listed on the TSX, and
issuers ceasing to be reporting issuers.
11
As noted above, the larger Canadian banks are not captured in our reviews due to their year-ends.
12
4%
4%
6%
6%
7%
8%
10%
Mining (172 issuers - 27%)
Other (89 issuers - 14%)
Real estate (55 issuers - 8%)
Retail (37 issuers - 6%)
Utilities (26 issuers - 4%)
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27%
15%
14%
Oil & gas (99 issuers - 15%)
Financial services (64 issuers - 10%)
Manufacturing (44 issuers - 7%)
Technology (37 issuers - 6%)
Biotechnology (25 issuers - 4%)
NEXT STEPS
The disclosure requirements have been in place for four annual reporting periods and in light of this experience, the CSA
are considering whether:
changes to the disclosure requirements are warranted and, if so, the nature of those changes, and
introduction of new or supplemental guidelines regarding corporate governance practices in National Policy 58-
201 Corporate Governance Practices is warranted and if so, the nature of those guidelines.
We have engaged in the following three areas of work:
Consultations
During winter and spring 2018, CSA staff consulted with a variety of stakeholders to better
understand their needs and perspectives. The consultations occurred through a variety of forums,
including consultation papers, roundtables and other meetings with stakeholders and email
communications.
Research
CSA staff revisited and updated research to support evidence-based policy making on the
following:
the approaches to gender diversity in certain jurisdictions outside of Canada,
director term limits,
shareholder proxy voting guidelines relating to gender diversity, and
academic and other studies on gender diversity and social and behavioural economics.
We will continue to conduct further research and analysis.
Disclosure reviews
CSA staff considered the key trends arising from the four annual disclosure reviews.
Based on this work, the CSA will determine whether changes to our regulatory regime are warranted. No decisions have
been made yet.
14
QUESTIONS
If you have any questions regarding this report, please contact:
Contacts
Ontario Securities Commission
Jo-Anne Matear
Leslie Milroy
☏ 416-593-2323
☏ 416-596-4272
📧 jmatear@osc.gov.on.ca
📧 lmilroy@osc.gov.on.ca
Katie DeBartolo
John Bulmer
☏ 416-593-2166
☏ 416-263-7660
📧 kdebartolo@osc.gov.on.ca
📧 jbulmer@osc.gov.on.ca
Alberta Securities Commission
Cheryl McGillivray
Rebecca Moen
☏ 403-297-3307
☏ 403-297-4846
📧 cheryl.mcgillivray@asc.ca
📧 rebecca.moen@asc.ca
Financial and Consumer Affairs Authority of Saskatchewan
Heather Kuchuran
☏ 306-787-1009
📧 heather.kuchuran@gov.sk.ca
The Manitoba Securities Commission
Wayne Bridgeman
☏ 204-945-4905
📧 wayne.bridgeman@gov.mb.ca
Autorité des marchés financiers
Martin Latulippe
Geneviève Fournier
☏ 514-395-0337, ext.4331
☏ 514-395-0337, ext.4335
📧 martin.latulippe@lautorite.qc.ca
📧 genevieve.fournier@lautorite.qc.ca
Michel Bourque
☏ 514-395-0337, ext.4466
📧 michel.bourque@lautorite.qc.ca
Financial and Consumer Services Commission (New Brunswick)
Ella-Jane Loomis
☏ 506-453-6591
📧 ella-jane.loomis@fcnb.ca
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APPENDIX A
The following is a year-over-year comparison of the percentage of issuers with one or more women on their boards by
industry:
Industry
Year 1
Year 2
Year 3
Year 4
Percentage of issuers with one or more women on their boards
Biotechnology
65%
57%
56%
56%
Financial Services
59%
67%
60%
61%
Manufacturing
60%
68%
84%
89%
Mining
35%
38%
54%
59%
Oil & Gas
40%
40%
45%
56%
Real Estate
64%
66%
59%
73%
Retail
78%
79%
89%
84%
Technology
39%
52%
52%
68%
Utilities
86%
82%
86%
81%
17
APPENDIX B
The following is a year-over-year comparison of the percentage of issuers with one or more women in executive officer
positions by industry:
Industry
Year 1
Year 2
Year 3
Year 4
Percentage of issuers with one or more women on in executive officer positions
Biotechnology
48%
66%
71%
64%
Financial Services
64%
63%
66%
71%
Manufacturing
61%
81%
79%
80%
Mining
52%
49%
52%
56%
Oil & Gas
49%
46%
48%
53%
Real Estate
76%
76%
80%
80%
Retail
82%
71%
68%
76%
Technology
45%
44%
59%
52%
Utilities
65%
73%
67%
75%
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