Human Resources Legislative Update
Bill Requiring Diversity Disclosure by Federal Corporations Passes Third Reading in Senate
Date: April 11, 2018
Diversity on corporate boards has been widely discussed in recent years. On March 22, 2018, Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act, passed its third reading in the Senate.
Part 1 of Bill C-25 imposes obligations on federal corporations with respect to diversity. This change is in line with recent changes to strengthen equity and diversity in other areas (see the 2018 Federal Budget and other initiatives such as the Equity, Diversity and Inclusion Action Plan).
Bill C-25 has not yet received Royal Assent. When it does, as part of the reforms to the Canada Business Corporations Act (CBCA), federal corporations will be required to disclose information regarding diversity in the composition of their boards and among members of senior management to shareholders at every annual meeting.
In addition, federal corporations will be required to send the prescribed diversity information to all shareholders along with the notice of meeting and to the Director appointed under the CBCA.
The regulation defining the prescribed diversity information and the rank of senior management captured by the reporting requirements has not yet been filed.
Editor’s Note: Bill C-25 received Royal Assent on May 1, 2018 and the provision set out above (s. 24) will come into force upon proclamation.