Bank Diversity Disclosure Regulations

Summary#

The government has published proposed Diversity Information Disclosure (Banks and Bank Holding Companies) Regulations under the Bank Act. If adopted, they would require certain banks and bank holding companies to publish simple, standard data about who sits on their boards and who holds senior management jobs, with a public comment period of 30 days from the notice published February 15, 2025 (deadline: March 17, 2025).

What it does#

• Requires distributing banks and distributing bank holding companies to make public information about diversity on their boards and in senior management.
• Asks for short factual items such as:
  • whether the board has term limits or other renewal methods, and why or why not;
  • whether there is a written policy for finding and nominating candidates from designated groups, and a short summary of that policy and how it is put into practice;
  • whether the board or its nominating committee considers representation of each designated group when choosing directors or senior managers, and how (or why not);
  • whether the bank has set targets (numbers or percentages) for each designated group on the board and in senior management, and the bank’s annual and cumulative progress toward those targets;
  • for each designated group, the number and share (percentage) of directors and senior managers who are members of that group — including reporting for all major subsidiaries.
• Defines a “major subsidiary” as one that accounts for 30% or more of the parent’s consolidated assets or revenue (based on the most recent balance sheet or income statement).
• Treats Indigenous groups — First Nations, Inuit and the Métis — as separate designated groups that must be reported separately.
• Provides a simple disclosure form (business name, date, and counts/percentages for groups such as Women, Persons with disabilities, Members of visible minorities, and Indigenous groups).
• These are proposed regulations under sections 214.1 and 801.1 of the Bank Act and refer to “designated groups” as defined in the Employment Equity Act.
• The notice invites comments for 30 days after publication. Comments were to be sent to Manuel Dussault, Department of Finance (contact details provided in the notice).
• The proposed rules would come into force on the day Division 40 of Part 4 of the Budget Implementation Act, 2024, No. 1 comes into force (or on registration if that happens later).

Who's affected#

• Distributing banks and distributing bank holding companies (these are the specific classes named in the proposal).
• Boards of directors and people in senior management at those institutions.
• Major subsidiaries of those banks, since their senior management counts must be included if they meet the 30% threshold.
• Members of the designated groups listed (for example Women, Persons with disabilities, Members of visible minorities, and First Nations, Inuit and the Métis) because their representation will be tracked and published.
• The general public, investors, employees and advocacy groups who use disclosure data to assess diversity and governance at banks.

Why it matters#

• It would make basic, comparable diversity data about bank leadership public. That makes it easier for customers, investors and the public to see who is represented at the top of major banks.
• Requiring targets, progress reporting and reasons when targets or policies are not in place could pressure banks to set and follow through on diversity plans.
• Separately reporting First Nations, Inuit and the Métis provides clearer information about Indigenous representation than grouping all Indigenous peoples together.
• Because this is a proposal, the rules are not final yet. The comment period (ending March 17, 2025) is the time for banks, community groups and others to give feedback before any final rules are made.