This report outlines the prevalent corporate governance policies and practices among organizations in Canada. There were 106 participants for the survey this year, compared to 81 participants in 2016.
Corporate governance overview
The most significant corporate governance issue continues to be risk management and oversight. Operational, reputational and cyber risk are the risks most commonly perceived as most critical by organizations. Strategic planning, risk management and succession planning are ranked as the top three board matters in 2017.
Corporate sustainability governance
The number of organizations with formal sustainability policies has decreased from 2016. Currently, less than half of respondents have a formal sustainability policy. However, over three quarters of organizations have implemented several sustainability initiatives, with improving energy efficiency being the most common initiative.
Approximately three quarters of the participants discuss executive compensation in their disclosure material. The responsibility for the executive compensation disclosure document is most commonly delegated to the human resources / compensation committee. The compensation disclosure document is most commonly available to the board of directors, executive management team and general public.
Enterprise risk management oversight and governance
61% of organizations have a fully implemented formal risk policy in place, a drop from 72% in 2016. In the majority of organizations, accountability for enterprise risk oversight and governance is shared between the board and standing committees. The top barrier to risk oversight is a gap in risk reporting, where there is a barrier in methodology, data and / or the tracking system.
Engagement by a governance team
The number of boards who schedule a structured meeting or call with shareholders at least once per year has increased to 53% from 47% in 2016. Media and regulators continue to be the most common stakeholder groups that interact with organizations.
The number of organizations with a formal board diversity policy has decreased from 2016. Currently, 32% of organizations have a fully implemented formal board diversity policy in place, half of which are publicly traded organizations. 91% of the organizations report having at least one female director on the board.
84% of organizations report having a separate board of directors for the organization’s significant subsidiaries. 35% of organizations have a written subsidiary governance framework in place and 38% of the organizations adopt formal board mandates and position descriptions at the subsidiary level.
Effective board and committee operations
When comparing the past four years, 2017 has the second highest prevalence of organizations with a formal policy for board performance evaluation. The most common board performance evaluation methodology is conducting an individual peer-evaluation survey led by the corporate secretary or other in-house personnel. Almost half of respondents reported that the majority of their directors attended an education program in the past year. The most common education topics include industry specific topics, risk oversight and organization policies.
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