Diversity Disclosure for Banks

Summary#

The federal government published a proposed rule called the Diversity Information Disclosure (Banks and Bank Holding Companies) Regulations on February 15, 2025. It would require certain banks and their holding companies to publicly report board and senior‑management diversity information, and officials are accepting comments for 30 days after publication.

What it does#

• Says that distributing banks and distributing bank holding companies (the classes defined by existing distributing‑bank rules) must make diversity information available.
• Requires disclosure about board renewal practices, including whether the bank has term limits or other renewal mechanisms.
• Requires banks to say whether they have a written policy to identify and nominate directors from the designated groups, and if so to provide:
  • a short summary of the policy’s goals and key points;
  • what steps the bank takes to put the policy into practice;
  • annual and cumulative progress toward the policy’s goals; and
  • whether and how the board (or its nominating committee) measures the policy’s effectiveness.
• Requires banks to say whether the board considers the level of representation of each designated group when nominating directors, and whether the bank considers representation in senior management when making appointments.
• Allows — but does not require — banks to adopt targets (numbers or percentages) for representation on the board and in senior management. If targets exist, banks must report the targets and progress; if not, they must explain why not.
• Requires a simple table showing, for each designated group, the number and share (percentage) of directors and of senior management, including for all major subsidiaries (a unit that accounts for 30% or more of consolidated assets or revenue).
• Treats First Nations, Inuit and the Métis as separate designated groups that must be reported separately.
• Sets definitions for terms such as major subsidiary and member of senior management (which covers named officers and vice‑presidents).
• Links the regulations’ start date to the coming‑into‑force of Division 40 of Part 4 of the Budget Implementation Act, 2024, No. 1 (or to the day the regulations are registered if that is later).

Who's affected#

• The primary obligations fall on the directors of distributing banks and distributing bank holding companies.
• Boards of directors and senior management teams of those banks will be the groups whose composition is reported.
• Major subsidiaries of those banks are included when counting senior management representation.
• Investors, shareholders, employee groups, diversity advocates, and Indigenous organizations may use the new disclosures.
• It is not clear from the notice whether smaller or non‑distributing banks would be covered; the rule targets the specific classes named above.

Why it matters#

• The rule is meant to increase public transparency about who is on bank boards and in senior leadership.
• Separate reporting for First Nations, Inuit and the Métis highlights Indigenous representation specifically, which can change how progress is tracked and discussed.
• Public disclosure can affect investor decisions, shareholder votes, and public pressure on banks to change recruitment or nomination practices.
• This is a proposed regulation, not final law; details could change after the public comment period.