Last month, the Department of Finance Canada released a consultation paper related to proposed changes to the existing governance framework for federally regulated financial institutions (FRFIs). The consultation dealt with a few topics, including diversity disclosure requirements and the ability for FRFIs to communicate with stakeholders electronically.

With respect to disclosure requirements, the consultation described the current requirements for public companies incorporated under the Canada Business Corporations Act (CBCA). For example, the CBCA requires those public companies to disclose the representation of women, visible minorities, Indigenous peoples, and people with disabilities in management and on the board of directors, as well as a company’s policies and targets (or lack thereof) with respect to representation. The consultation requested comments on applying the CBCA’s “comply or explain” provisions to FRFIs, as well as whether additional compliance measures such as mandatory use of a prescribed form or penalties for failure to comply should be added.

The consultation also sought feedback on permitting “all virtual meetings”, as well as on the considerations for the use of electronic communications with owners/shareholders of FRFIs for governance documents. The consultation asked questions on both the “notice and access” model or, similar to recent proposals by the Canadian Securities Administrators, an “access equals delivery” model for governance documents.

September 28, 2022