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The Globe and Mail is gearing up for the 25th iteration of its Report on Business’s Board Games initiative, which evaluates the governance practices of Canadian corporate boards. This project employs a stringent set of criteria that exceeds the basic regulatory requirements, providing a comprehensive analysis of how companies are performing in terms of governance. The marking criteria will be unveiled early in the corporate proxy season, coinciding with the release of management information circulars by most Canadian firms.
A Focus on Governance Quality
In collaboration with Global Governance Advisors, the Globe will scrutinise the boards of directors across companies listed in the S&P/TSX Composite Index. The forthcoming Board Games report for 2026 will assess these boards based on their governance practices and the clarity of their disclosures. While the marking methodology underwent significant revisions last year, the adjustments for 2026 are relatively modest, with a notable addition concerning cybersecurity and technology risk management.
New Criteria for Cybersecurity and Technology
One of the most significant updates is the introduction of partial marks for companies that demonstrate oversight of cybersecurity and technology risks, even if they do not specifically address artificial intelligence (AI) management. This change reflects the growing importance of these issues in corporate governance, recognising that companies can still score if they provide adequate descriptions of their technology risk oversight.
Detailed Assessment Metrics
The assessment framework is extensive, encompassing 14 categories, each contributing to a total of 100 marks. Key areas of evaluation include:
1. **Board Composition and Independence**: Boards with at least two-thirds independent directors can earn up to four marks, while those with a majority of non-independent directors receive none.
2. **Diversity Initiatives**: Companies can earn points for the representation of women and other diverse groups on their boards. Specific marks are allocated based on the percentage of diverse board members and the existence of policies to promote diversity.
3. **Director Commitments**: The framework assesses whether directors hold positions on too many boards, with penalties for overboarded directors that may dilute their effectiveness.
4. **Performance Evaluations**: A formal evaluation system for board performance and individual directors is crucial for scoring well, with marks awarded for transparency in these processes.
5. **Climate Responsibility**: The criteria also evaluate how boards manage climate-related risks, with specific marks for disclosing responsibilities and targets related to climate oversight.
By clearly outlining these metrics, the Globe aims to provide shareholders with a transparent view of how well companies are managing governance in critical areas.
Why it Matters
The Board Games initiative serves as a vital tool for enhancing corporate accountability in Canada. By holding companies to a higher standard of governance, it fosters a culture of transparency and responsibility that benefits shareholders and stakeholders alike. As the corporate landscape evolves, particularly in light of technological advancements and climate change, these assessments will be crucial in guiding companies to adopt best practices that align with societal expectations and regulatory demands. The findings will not only influence corporate behaviour but also empower investors to make informed decisions based on governance quality, ultimately shaping the future of corporate governance in Canada.
