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Senior Canadian public companies will be expected to have at least one racial-minority director, under new benchmark voting policies adopted by proxy advisory firm Institutional Shareholder Services Inc. (ISS), for the upcoming proxy season.

ISS released its updated voting policies for the 2023 proxy season, which will apply to companies holding their annual meetings after Feb. 1, 2023. However, its key change to its voting policies in Canada will include a one-year grace period, taking effect in the 2024 proxy season.

At that point, ISS will expect companies that belong to the S&P/TSX Composite Index to have at least one racially/ethnically diverse director.

“This reflects broadened Canadian disclosure requirements in this area and increasing investor expectations of board diversity,” ISS said in a release outlining its updated voting policies.

Additionally, for 2023, the firm is extending its board accountability policy to all high carbon-emitting companies. Under that policy, it may recommend votes against boards that don’t make adequate disclosure, or haven’t adopted emission reduction targets for their direct emissions.

Among other things, its updated policies also address a variety of corporate governance issues — including the transparency of political contributions, board gender diversity, director compensation, and the continued use of virtual shareholder meetings.