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Updates On CBCA Diversity Disclosure Guidelines: How To Successfully Disclose Diversity For The Upcoming Proxy Season

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Capital Perspectives – Newsletter

On Feb. 7, 2022, Corporations Canada updated its guidelines on mandatory diversity disclosure regarding designated groups for federally incorporated public companies. The updated guidelines provide additional information after a review of the past two years of disclosure since the release of the diversity disclosure requirements under the Canada Business Corporations Act (the CBCA) in January 2020.

After these first two years of data collection, Corporations Canada has provided corporations information on how to communicate their diversity information more effectively and in a more consistent format. This article summarizes the key components of Corporations Canada’s disclosure guidelines and requirements and identifies additional considerations for enhanced diversity disclosure.

Background: Diversity Disclosure Requirements

Under the CBCA amendment effective since January 2020, federal distributing corporations, including venture issuers listed on the TSX Venture Exchange, must report to their shareholders and Corporations Canada on “designated groups” members of their boards of directors and senior management teams, at a minimum.

The designated groups, as defined under section 3 of the Employment Equity Act (Canada), are:

  • women;
  • Aboriginal peoples (First Nations, Inuit and Métis);
  • persons with disabilities; and
  • members of visible minorities.

Moreover, the corporation's senior management team includes:

  • chair and vice-chair of the board of directors;
  • president of the corporation;
  • chief executive officer and chief financial officer;
  • vice-president in charge of a principal business unit, division or function, including sales, finance or production; and
  • anyone who performs a policy-making function within the corporation.

Federal distributing corporations must either “comply or explain” in their disclosure the following information:

  • Whether the corporation has a written policy relating to the identification and nomination of directors from the designated groups, and if so, a description of the policy;
  • Whether and, if so, how your board or nominating committee considers diversity on the board in identifying and nominating candidates for election or re-election to the board;
  • Whether and, if so, how your corporation considers diversity when making senior management appointments;
  • Whether your corporation has targets for representation on the board and among senior management for each of the designated groups and, if so, progress in achieving those targets;
  • The number and percentage of directors from each of the designated groups on the board and senior management; and
  • Whether the corporation has adopted term limits or other mechanisms for board renewal.

Lessons Learned: Dos and Don’ts of Diversity Disclosure

Identified below are the six recommendations from Corporations Canada as identified in the new guidelines as well as other practical suggestions to improve disclosure obligations.

  1. Clearly indicate the date of the diversity disclosure. There can be changes to directors and senior management throughout the course of the year. As a result, it is important that the corporation identify whether the disclosure of the information is as of its financial year end, as of the date of its management proxy circular or another date chosen by the corporation. The corporation may choose to identify different dates to explain how its diversity disclosure may have changed over the course of the year.
  2. Disclose and detail your written policy. The corporation is obligated to identify if it has, or has not, adopted a written policy relating to the identification and nomination of directors from the designated groups. If no written policy has been adopted, the corporation must explain why it has not done so. Some corporations choose to identify when they are in the process of adopting a written policy. If a corporation does so, it is important to ensure that by the following disclosure period the process is complete so it can be appropriately disclosed and show continuity.

If a policy has been adopted, the corporation must disclose the following information:

  • a summary of the policy's objectives and key provisions;
  • the measures to be taken to ensure that the policy is effectively implemented;
  • a description of progress made toward achieving the objectives of the policy during the year and/or since implementation;
  • and whether the board, or its nominating committee, measures the effectiveness of the policy and, if so, a description of how it is measured.
  1. Disclose and explain diversity considerations when nominating board candidates AND appointing senior management. The corporation is required to disclose how, and if, it considered diversity in identifying board candidates. Some corporations seek the assistance of third-party organizations that have vetted potential director candidates to assist corporations in bringing qualified candidates varied skills, backgrounds and diversity into the corporation.

Additionally, corporations must disclose if they consider diversity criteria, and how such criteria are considered, when nominating new board members and also when nominating for re-election existing board members. Similarly, the corporation must disclose if it considers diversity criteria when appointing members of senior management and how such diversity criteria are considered.

If the corporation does not consider diversity criteria, then it must disclose why such criteria are not considered.

  1. Disclose diversity targets. The corporation is required to disclose whether it has adopted targets for representation of each designated group on the board and among senior management. If the corporation has adopted targets, it must provide the expected timeframe for achieving the targets, as well as the progress made toward achieving the targets during the year and since such targets were adopted.
  2. Disclose diversity number and percentage for each of the designated members. Corporations must disclose both the number and the percentage of directors from each of the designated groups on the board of directors and separately among senior management.

To accurately know and understand the representation and diversity on the corporation’s board, it is useful to circulate a questionnaire to the directors and senior management that will encourage and allow for self-identification by individuals. Sometimes corporations are not aware of diversity among their existing directors and senior management. The corporation should also identify that the disclosure in the management proxy circular is as a result of self-identification.

This information is most usefully disclosed in a table format (see below an example from Corporations Canada) rather than a few sentences which highlight information only about one or two of the designated groups. It is important for corporations to identify the total numbers of directors or senior management, and then the number and percentages relevant for each designated group and similarly identify the date of the disclosure.

Total number of directors on the board of directors and senior management members

Board of directors

[Indicate the total number of directors]

Senior management

[Indicate the total number of senior management members]


Representation of designated groups on the board of directors

Designated groups




[Indicate the number]

[Indicate the percentage]

Indigenous peoples

[Indicate the number]

[Indicate the percentage]

Members of visible minorities

[Indicate the number]

[Indicate the percentage]

Persons with disabilities

[Indicate the number]

[Indicate the percentage]

Number of individuals who are members of more than one designated group

[Indicate the number]

[Indicate the percentage]


  1. Disclose the term limits for directors. Corporations often have in place age limits, tenure limits and other mechanisms all of which contribute to board renewal and provide opportunities for increased diversity. However, corporations sometimes fail to focus on these mechanisms as part of their disclosure. It is important to identify these mechanisms because if the corporation has not adopted term limits or other mechanisms for directors, it must specify this and explain why it has not done so.


Diversity is increasingly important within the corporation and external to the corporation – including to shareholders who invest in the corporation and to other stakeholders who do business with, or are considering partnering with, the corporation. Clear and consistent disclosure of diversity allow for the corporation’s stakeholders internally and externally to understand the corporation’s process and analysis of how and why diversity on the board and senior management is important to the corporation.

Corporation Canada’s guidelines provide a methodology for more consistent disclosure which in turn may allow stakeholders to better understand the disclosure and to more easily compare the diversity of different corporations. 

And, don’t forget … to ensure that the corporation files its management proxy circular with Corporations Canada, immediately after filing its documentation with the appropriate securities regulatory authorities.

Virginia Schweitzer is co-managing partner with the Fasken Ottawa office. As a leading corporate and M&A lawyer, she has provided counsel to technology and mining clients across North America for IPOs, private placements, mergers and acquisitions and to not-for-profit corporations on corporate governance issues. 

Julien Frigon is an articling student with the Fasken Ottawa office who graduated from the University of Ottawa with degrees in both common law and civil law. He has coordinated the Pro Bono clinic ID Project, has worked as a research assistant and been involved with the Ottawa Law Review.

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