August 28, 2023

No clear consensus on diversity disclosures

The CSA extended the comment period for competing corporate governance proposals

James Langton | Investment Executive

Securities regulators may agree on the need to improve issuers’ diversity disclosure, but they can’t agree on how to achieve it. A public consultation on the issue so far isn’t building consensus.

In April, the Canadian Securities Administrators (CSA) proposed changes to corporate governance requirements, publishing two approaches for expanding diversity disclosures beyond gender.

The Ontario Securities Commission’s (OSC) approach would require issuers to report on the representation of five groups (including women) on their boards and in executive positions.

The securities regulators for Alberta, British Columbia, Saskatchewan and the Northwest Territories favoured requirements that would require companies to disclose their approach to diversity without mandating disclosure on specific groups.

The remaining eight CSA members, including Quebec’s Autorité des marchés financiers, declined to pick a side.


The Canadian Investor Relations Institute (CIRI) found in a survey that many of its members are concerned about collecting information that would be required by the OSC proposal, including sexual orientation and identity, and visible-minority status.

“These concerns stem mostly from privacy but some feel there are too many categories, not the right categories and/or issues with the collection process,” CIRI’s submission stated.

Meanwhile, the Institute for Governance of Private and Public Organizations (IGOPP) highlighted the risks of relying on self-identification for diversity reporting.

Some prefer to exclude themselves from a group to avoid being labeled, categorized or even simply out of embarrassment or a desire to keep these characteristics confidential. Others will want to ensure that their application is not selected to meet diversity ratios, the IGOPP said in its submission. On the other hand, some may see [false] disclosure as a career opportunity.

These risks also were acknowledged by proponents of the OSC’s approach, such as SHARE. Yet, SHARE argued that enhanced disclosure will ultimately help lower barriers.

“Increasing disclosure helps to make the presence of individuals from traditionally under-represented groups more visible at senior levels of the organization, encourages a more inclusive culture generally, and thus should improve the accuracy of disclosures over time,” SHARE’s submission stated. “[A]cknowledging imperfection is no reason to abdicate the responsibility to regulate clearly and fairly.”

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