Peggy's Cove Lighthouse Nova Scotia

As policy-makers consider action to address the lack of diversity in corporate Canada, regulators in New Brunswick and Nova Scotia are launching a consultation on possible reforms to governance requirements.

The Nova Scotia Securities Commission (NSSC) and the New Brunswick Financial and Consumer Services Commission (FCNB) published a joint paper that seeks feedback on a variety of diversity and corporate governance issues.

In particular, the regulators are seeking input on whether added disclosure requirements are needed — possibly expanding disclosure beyond gender to other characteristics (such as ethnicity or sexual orientation) — how investors may use this kind of information, and the potential impact on public companies, including potential privacy concerns.

The paper also seeks feedback on the notion of using targets as a mechanism for improving diversity on boards and in executive suites, and of setting term limits for directors as a way of driving board renewal.

“Your replies to the consultation questions will help determine whether, and how, the disclosure needs of Canadian investors, and corporate governance practices among public companies, have evolved since the ‘women on boards’ disclosure requirements were first adopted in most CSA jurisdictions,” the regulators said in the paper.

The effort follows a pledge to examine issues of diversity and disclosure by the Canadian Securities Administrators (CSA) back in May.

At that time, the CSA indicated it was undertaking research and consultations amid growing attention to diversity issues “in all segments of society, including business.”

“Consultation and engagement with stakeholders will help determine the right path forward with respect to a broader diversity initiative,” Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers, said in May.

In addition to the joint NSSC-FCNB paper, which seeks written feedback by Nov. 15, the Ontario Securities Commission is planning a virtual roundtable to discuss these same issues on Oct. 13.

The CSA’s pledge to consider reform comes amid a similar push in other markets.

For instance, Nasdaq recently adopted more expansive diversity disclosure requirements, which include a “comply or explain” requirement for companies to have at least two “diverse” directors, including one female and one who identifies as an ethnic minority or as LGBTQ+.