Canadian regulators are demanding more corporate governance disclosure

The Canadian Securities Administrators (CSA), a voluntary umbrella organization, released its CSA Staff Notice 58-306 2010 Corporate Governance Disclosure Compliance Review, which provides guidance on complying with current disclosure requirements.
 
The CSA studied filings from 72 corporate issuers for compliance with National Instrument 58-101 Disclosure of Corporate Governance Practices. The notice carefully sets out the results compiled from the analysis of issuers' corporate governance disclosure filed in their most recent management information circular. According to the Canadian capital markets regulator, the review found that despite other factors, 55 percent of reporting issuers reviewed were required to make prospective enhancements to their corporate governance disclosure, a figured that jumped from 36 percent in a prior review in 2007.

‘Given the results of the review, the notice is intended to be an educational tool for reporting issuers,’ said Jean St-Gelais, chair of the CSA. '[It’ll] assist them in improving their corporate governance disclosure.’
The release also identifies areas that need improvement, such as, description of directors' positions and qualifications, director orientation and continuing education, ethical business conduct, nomination of directors and board assessments.  

In instances where discrepancies in information surfaced, issuers complied to make changes in future filings.

‘The CSA will continue to monitor corporate governance disclosure, and issuers should anticipate staff requests for additional disclosure or re-filings, if required,’ the regulator said. Companies at which reporting discrepancies had been identified have generally agreed to make changes in future filings, the CSA staff explained.

‘Disclosure of corporate governance practices is important for investors, who require access to regular, reliable and comparable information in sufficient detail in order to make informed investment decisions,’ the CEO said.  

Last month, the CSA published for comment proposed amendments to the Statement of Executive Compensation, which was designed to improve the notice that investors receive relating to executive compensation. Similar to the most recent staff notice, the proposals clarify existing requirements while providing new ones to improve the quality of information disclosed by public companies.  This serves as part of CSA's ongoing efforts to 'harmonize regulation' among Canada's capital markets.