The Ontario Securities Commission sign is seen in the regulator's Toronto office.Peter Power/The Globe and Mail
Six more provinces and two territories are developing rules requiring companies to report on the representation of women on their boards of directors, following in the footsteps of a similar proposal published earlier this year in Ontario.
Regulators in Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Newfoundland, the Northwest Territories and Nunavut said Thursday they will publish the same proposed rules for public comment that Ontario unveiled in January.
British Columbia, Alberta and Prince Edward Island are still not participating in the rule change. Alberta and B.C. regulators said Thursday they do not believe they have the mandate to get involved in board diversity issues.
The proposed rule would require large public companies to report annually on the representation of women on their boards and in senior management and disclose information about their diversity policies. Under the so-called "comply or explain" standard, companies would have the option to comply with the reporting requirement or else explain why they have opted not to participate.
"This transparency is intended to assist investors when making investment and voting decisions," the participating provinces said in a joint release Thursday.
The provinces said the proposed "comply or explain" approach is consistent with Canada's existing corporate standards in other areas, most of which are also not mandatory.
Alberta Securities Commission spokeswoman Alison Trollope said the regulator did not agree to participate because it does not believe it has the mandate to require reporting on diversity.
"We encourage strong boards comprised of a mix of the most qualified individuals. It would absolutely make sense that half of the population would be considered for board positions," she said in an e-mail. "That said, it falls outside our mandate to compel issuers to do so."
The ASC issued a statement Thursday, saying that many investors favour diversity and companies can elaborate on the issues at their choosing.
B.C. Securities Commission spokeswoman Pamela McDonald said the OSC initiative "highlights an important issue," but said the impetus for the project came from consultations and research with companies in Ontario, not in British Columbia.
She said the BCSC is "reluctant" to impose new requirements without considering local factors such as whether the costs of compliance "are justified by benefits to local investors."
The new provinces joining the campaign said their public comment period on the proposed rules will remain open until Sept. 2, and said they anticipate they will co-ordinate their efforts with the Ontario Securities Commission.
OSC spokeswoman Carolyn Shaw-Rimmington said the commission anticipates it will publish the final version of its rules in the fall, with an anticipated implementation date of Dec. 31. The OSC already had a public comment period for its rules, which ended April 16.
The rules are aimed at larger companies that trade on the TSX or report in the participating provinces. Smaller venture firms, including those that trade on the TSX Venture Exchange, would be exempted.
The broader participation of more provinces sends a strong signal of support for the reforms, but will not have a major impact on the number of companies affected by the rules.
That's because the Toronto Stock Exchange is based in Toronto and regulated by the OSC, so all companies trading on the exchange will have to adhere with OSC standards even if they are headquartered in other provinces.
Janet McFarland