S-206
Third Session, Fortieth Parliament,
59 Elizabeth II, 2010
SENATE OF CANADA
BILL S-206
An Act to establish gender parity on the board of directors of certain corporations, financial institutions and parent Crown corporations
first reading, March 9, 2010
THE HONOURABLE SENATOR HERVIEUX-PAYETTE, P.C.
3810418
SUMMARY
This enactment requires the following corporations and financial institutions to achieve parity in the number of women and men serving as directors:
(a) every corporation that is a distributing corporation under the Canada Business Corporations Act and has issued securities that remain outstanding and that are held by more than one person;
(b) every bank that is listed in Schedule I to the Bank Act;
(c) every insurance company and every trust and loan company that is a distributing company;
(d) every cooperative credit association; and
(e) other publicly traded corporations.
The requirement must be met whenever directors are elected or appointed, starting at the second annual meeting following the day on which the relevant provision comes into force. The organization may apply for a deferral to the third annual meeting if it would have to amend its articles or incorporating instrument and suffer undue hardship in order to comply earlier.
The requirements are enforced by making compliance by an organization a condition for the issuance of a certificate or letters patent, or the exercise of a power, required to make effective certain processes, proposals or amendments.
The requirement for gender parity also applies to the parent Crown corporations listed in Schedule III to the Financial Administration Act. In these cases the requirement applies three years after the relevant provision comes into force.
Available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
3rd Session, 40th Parliament,
59 Elizabeth II, 2010
senate of canada
BILL S-206
An Act to establish gender parity on the board of directors of certain corporations, financial institutions and parent Crown corporations
Preamble
Whereas the majority of corporations, financial institutions and parent Crown corporations have many more men than women as directors;
Whereas women are active participants in the business community, as business owners, shareholders, officers, managers and employees, and in the market as consumers, and should have equal representation in the management of business;
Whereas women are active participants in the democratic government of the country as voters and politicians and should have equal representation in the management of parent Crown corporations;
And whereas there are many women in Canada who have the qualifications and experience to act as corporate directors;
Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Short title
1. This Act may be cited as the Board of Directors Gender Parity Act.
PART 1
BUSINESS CORPORATIONS
R.S., c. C-44
Canada Business Corporations Act
2. The Canada Business Corporations Act is amended by adding the following after section 105:
Definition of “distributing corporation”
105.1 (1) In this section and sections 105.2 and 105.3, “distributing corporation” means a distributing corporation as defined in subsection 2(1), any of the issued securities of which remain outstanding and are held by more than one person.
Gender parity requirement
(2) The composition of the board of directors of a distributing corporation shall be such that, immediately after any election or appointment of directors,
(a) 50 per cent of the directors are women, if the corporation has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the corporation has an odd number of directors.
Application
(3) Subsection (2) does not apply to a distributing corporation until the opening of the second annual meeting of shareholders following the day on which that subsection comes into force.
Deferral
105.2 The Director may, on application by a distributing corporation, defer the time from which subsection 105.1(2) applies to the corporation to the opening of the third annual meeting of shareholders following the day on which that subsection comes into force, if the Director is satisfied that
(a) the articles would have to be amended to increase the number of directors, or the maximum number of directors, to achieve compliance with that subsection without replacing directors who are officers or employees of the corporation or any of its affiliates; and
(b) filling the increased number of directors’ positions would cause the corporation undue hardship.
Validity of acts
105.3 An act of the board of directors of a distributing corporation to which subsection 105.1(2) applies is not invalid on the sole ground that the composition of the board is not in compliance with that subsection.
3. Section 260 of the Act is replaced by the following:
Appointment of Director
260. The Minister may appoint a Director and one or more Deputy Directors to carry out the duties and exercise the powers of the Director under this Act or any other Act of Parliament.
4. (1) Subsection 262(2) of the Act is amended by striking out “and” at the end of paragraph (a) and by adding the following after paragraph (a):
(a.1) in the case of a corporation to which subsection 105.1(2) applies, the articles or the statement shall have attached thereto a statutory declaration or certificate made by a director or officer of the corporation stating whether the corporation and those of its affiliates to which subsection 105.1(2) applies have complied with that subsection; and
(2) Section 262 of the Act is amended by adding the following after subsection (2):
Condition
(2.1) Despite any other provision of this Act but subject to subsection (2.2), the Director shall not issue a certificate under this section in respect of a corporation to which subsection 105.1(2) applies unless the Director is satisfied that the corporation and those of its affiliates to which subsection 105.1(2) applies are in compliance with subsection 105.1(2).
Exception
(2.2) Subsection (2.1) does not apply to a certificate related to a matter that will enable a corporation to comply with subsection 105.1(2).
PART 2
FINANCIAL INSTITUTIONS
1991, c. 46
Bank Act
5. The Bank Act is amended by adding the following after section 159:
Definition of “bank”
159.1 (1) In this section and section 159.2, “bank” means a bank listed in Schedule I.
Gender parity requirement
(2) The composition of the board of directors of a bank shall be such that, immediately after any election or appointment of directors,
(a) 50 per cent of the directors are women, if the bank has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the bank has an odd number of directors.
Application
(3) Subsection (2) does not apply to a bank until the opening of the second annual meeting of shareholders following the day on which that subsection comes into force.
Deferral
159.2 The Superintendent may, on application by a bank, defer the time from which subsection 159.1(2) applies to the bank to the opening of the third annual meeting of shareholders following the day on which that subsection comes into force, if the Superintendent is satisfied that
(a) the incorporating instrument would have to be amended to increase the number of directors, or the maximum number of directors, to achieve compliance with that subsection without replacing directors who are officers or employees of the bank; and
(b) filling the increased number of directors’ positions would cause the bank undue hardship.
6. Section 216 of the Act is amended by adding the following after subsection (1):
Condition
(1.1) The Minister shall not issue letters patent pursuant to this section to effect a proposal in respect of a bank to which subsection 159.1(2) applies unless the Minister is satisfied that the bank is in compliance with that subsection.
Exception
(1.2) Subsection (1.1) does not apply to a proposal that will enable the bank to be in compliance with subsection 159.1(2).
1991, c. 48
Cooperative Credit Associations Act
7. The Cooperative Credit Associations Act is amended by adding the following after section 169:
Gender parity requirement
169.1 (1) The composition of the board of directors of an association shall be such that, immediately after any election or appointment of directors,
(a) 50 per cent of the directors are women, if the association has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the association has an odd number of directors.
Application
(2) Subsection (1) does not apply to an association until the opening of the second annual meeting of the association following the day on which that subsection comes into force.
Deferral
169.2 The Superintendent may, on application by an association, defer the time from which subsection 169.1(1) applies to the association to the opening of the third annual meeting of the association following the day on which that subsection comes into force, if the Superintendent is satisfied that
(a) the incorporating instrument would have to be amended to increase the number of directors, or the maximum number of directors, to achieve compliance with that subsection without replacing directors who are officers or employees of the association; and
(b) filling the increased number of directors’ positions would cause the association undue hardship.
8. Section 220 of the Act is amended by adding the following after subsection (1):
Condition
(1.1) The Minister shall not issue letters patent pursuant to this section to effect a proposal in respect of an association to which subsection 169.1(1) applies unless the Minister is satisfied that the association is in compliance with that subsection.
Exception
(1.2) Subsection (1.1) does not apply to a proposal that will enable the association to be in compliance with subsection 169.1(1).
1991, c. 47
Insurance Companies Act
9. The Insurance Companies Act is amended by adding the following after section 167:
Gender parity requirement
167.1 (1) The composition of the board of directors of a distributing company shall be such that, immediately after any election or appointment of directors,
(a) 50 per cent of the directors are women, if the company has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the company has an odd number of directors.
Application
(2) Subsection (1) does not apply to a distributing company until the opening of the second annual meeting of shareholders and policyholders following the day on which that subsection comes into force.
Deferral
167.2 The Superintendent may, on application by a distributing company, defer the time from which subsection 167.1(1) applies to the distributing company to the opening of the third annual meeting of shareholders and policyholders following the day on which that subsection comes into force, if the Superintendent is satisfied that
(a) the incorporating instrument would have to be amended to increase the number of directors, or the maximum number of directors, to achieve compliance with that subsection without replacing directors who are officers or employees of the distributing company; and
(b) filling the increased number of directors’ positions would cause the distributing company undue hardship.
10. Section 225 of the Act is amended by adding the following after subsection (1):
Condition
(1.1) The Minister shall not issue letters patent pursuant to this section to effect a proposal in respect of a company to which subsection 167.1(1) applies unless the Minister is satisfied that the company is in compliance with that subsection.
Exception
(1.2) Subsection (1.1) does not apply to a proposal that will enable the company to be in compliance with subsection 167.1(1).
1991, c. 45
Trust and Loan Companies Act
11. The Trust and Loan Companies Act is amended by adding the following after section 163:
Gender parity requirement
163.1 (1) The composition of the board of directors of a distributing company shall be such that, immediately after any election or appointment of directors,
(a) 50 per cent of the directors are women, if the company has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the company has an odd number of directors.
Application
(2) Subsection (1) does not apply to a distributing company until the opening of the second annual meeting of shareholders following the day on which that subsection comes into force.
Deferral
163.2 The Superintendent may, on application by a distributing company, defer the time from which subsection 163.1(1) applies to the distributing company to the opening of the third annual meeting of shareholders following the day on which that subsection comes into force, if the Superintendent is satisfied that
(a) the incorporating instrument would have to be amended to increase the number of directors, or the maximum number of directors, to achieve compliance with that subsection without replacing directors who are officers or employees of the distributing company; and
(b) filling the increased number of directors’ positions would cause the distributing company undue hardship.
12. Section 221 of the Act is amended by adding the following after subsection (1):
Condition
(1.1) The Minister shall not issue letters patent pursuant to this section to effect a proposal in respect of a company to which subsection 163.1(1) applies unless the Minister is satisfied that the company is in compliance with that subsection.
Exception
(1.2) Subsection (1.1) does not apply to a proposal that will enable the company to be in compliance with subsection 163.1(1).
PART 3
OTHER PUBLICLY TRADED CORPORATIONS
Definitions
13. The following definitions apply in this Part.
“corporation”« société »
“corporation” means
(a) a corporation that is a reporting issuer under any legislation that is set out in column 2 of an item of Schedule 1 to the Canada Business Corporations Regulations, 2001, or
(b) in the case of a corporation that is not a reporting issuer referred to in paragraph (a), a corporation
(i) that has filed a prospectus or registration statement under provincial or foreign legislation,
(ii) any of the securities of which are listed and posted for trading on a stock exchange in or outside Canada, or
(iii) that is involved in, is formed for, results from or is continued after an amalgamation, a reorganization, an arrangement or a statutory procedure, if one of the participating bodies corporate is a corporation referred to in subparagraph (i) or (ii),
but does not include a corporation
(c) that is subject to an exemption under provincial securities legislation or to an order of the relevant provincial securities regulator that provides that the corporation is not a reporting issuer for the purposes of the applicable legislation,
(d) listed in any of the schedules to the Financial Administration Act, or
(e) to which the Bank Act, the Canada Business Corporations Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act applies.
“Director”« directeur »
“Director” means the Director appointed under section 260 of the Canada Business Corporations Act.
“incorporating instrument”« acte constitutif »
“incorporating instrument” means the special Act, letters patent, instrument of continuance or other constating instrument by which a body corporate was incorporated or continued and includes any amendment to or restatement of the constating instrument.
Gender parity requirement
14. (1) The composition of the board of directors of a corporation shall be such that, immediately after any election or appointment of directors,
(a) 50 per cent of the directors are women, if the corporation has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the corporation has an odd number of directors.
Application
(2) Subsection (1) does not apply to a corporation until the opening of the second annual meeting of the corporation following the day on which that subsection comes into force.
Deferral
15. The Director may, on application by a corporation, defer the time from which subsection 14(1) applies to the corporation to the opening of the third annual meeting of the corporation following the day on which that subsection comes into force, if the Director is satisfied that
(a) the incorporating instrument would have to be amended to increase the number of directors, or the maximum number of directors, to achieve compliance with that subsection without replacing directors who are officers or employees of the corporation; and
(b) filling the increased number of directors’ positions would cause the corporation undue hardship.
Amendment of by-laws or incorporating instruments
16. (1) If a corporation to which subsection 14(1) applies amends its by-laws or incorporating instruments and the amendment becomes effective on the exercise of a power by any person under an Act of Parliament, that person shall not exercise the power unless satisfied that the corporation is in compliance with subsection 14(1).
Exception
(2) Subsection (1) does not apply to an amendment that will enable the corporation to be in compliance with subsection 14(1).
Validity of acts
17. An act of the board of directors of a corporation to which subsection 14(1) applies is not invalid on the sole ground that the composition of the board is not in compliance with that subsection.
PART 4
PARENT CROWN CORPORATIONS
R.S., c. F-11
Financial Administration Act
18. The Financial Administration Act is amended by adding the following after section 105:
Gender parity requirement
105.1 (1) The composition of the board of directors of a parent Crown corporation shall be such that, immediately after any appointment of directors,
(a) 50 per cent of the directors are women, if the parent Crown corporation has an even number of directors; or
(b) the difference between the number of directors who are women and the number who are men is equal to one, if the parent Crown corporation has an odd number of directors.
Application
(2) Subsection (1) applies to a parent Crown corporation from the day that is three years after the day on which that subsection comes into force.
Validity of acts
(3) An act of the board of directors of a parent Crown corporation to which subsection (1) applies is not invalid on the sole ground that the composition of the board is not in compliance with that subsection.
PART 5
COMMENCEMENT
Coming into force
19. This Act comes into force 180 days after the day on which it receives royal assent.
Published under authority of the Senate of CanadaAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada
Explanatory Notes
Canada Business Corporations Act
Clause 2: New.
Clause 3: Exisiting text of section 260:
260. The Minister may appoint a Director and one or more Deputy Directors to carry out the duties and exercise the powers of the Director under this Act.
Clause 4: (1) Relevant portion of subsection 262(2):
(2) Where this Act requires that articles or a statement relating to a corporation be sent to the Director,
(2) New.
Bank Act
Clauses 5 and 6: New.
Cooperative Credit Associations Act
Clauses 7 and 8: New.
Insurance Companies Act
Clauses 9 and 10: New.
Trust and Loan Companies Act
Clauses 11 and 12: New.
Financial Administration Act
Clause 18: New.