John Ivison: Senate amendments to gender diversity bill set to test Trudeau’s feminist principles

Find Ivison overly alarmist here. Requiring companies to have diversity plans but allowing them to set their own targets, with annual reporting, is a reasonable balance between doing virtually nothing and moving the yardstick.

There are likely some changes that may be needed (e.g., size of companies that are covered).

Bu is meritocracy really at risk as Ivison argues? Seem to recall same argument being used each time organizations want to increase diversity:

Are there any limits to how far Justin Trudeau will go to foster diversity and inclusion? We may be about to find out.

While he was in Davos, the prime minister made a big deal about the representation of women on corporate boards.

“Companies should have a formal policy on gender diversity and make the recruitment of women candidates a priority,” he said in his speech to the World Economic Forum.

To this end, the Liberal government has introduced a bill (C-25) to amend the Canada Business Corporations Act, which (among other things) requires companies to place their diversity policy before their shareholders, and if they fail to do so, to explain why (the widely adopted “comply or explain” approach).

Even that level of intervention has some free marketers wondering what business it is of the government to interfere in the running of private corporations.

But the current proposal is tame compared to amendments being proposed by a group of influential senators that will have many executives choking on their Porterhouse steak.

The six senators — Serge Joyal, Frances Lankin, Paul Massicotte, Lucie Moncion, Ratna Omidvar and André Pratte — have written to their colleagues saying they believe the current bill “lacks teeth.”

They would like to add amendments that would force the 270,000 companies incorporated under the CBCA to adopt diversity policies that set numerical goals and timetables on female, indigenous, disabled and visible minority board representation. Companies would have to report their progress not just to their shareholders but, “for the purposes of monitoring,” to the government. Ministers would be required to prepare and publish a report on the data – a clear indication that further corrective action could one day be taken.

“To be clear: our amendment would not set quotas,” the senators say.

Nonetheless, quotas would be set, even if, at this stage, by the companies themselves.

The senators are now rallying their colleagues and if they have the votes, bill C-25 will be sent back to the House of Commons. One source said there appears to be a critical mass of senators in favour of the amendments, which will likely be introduced next week.

At that point, Trudeau will have a decision to make. While the government has not looked kindly on Senate amendments, Trudeau charged senators to use their independent judgment to improve government legislation. He is unlikely to want to shirk what he sees as his moral duty to promote diversity and inclusion.

Carol Hansell, senior partner at the Toronto law firm Hansell LLP, is critical of the bill in its existing form for a number of reasons, principally because it will force companies to hold annual elections of individual directors — the concept of majority voting. She said she believes governance should flow from securities regulation, not corporate statute, which she deems too rigid to respond to changing circumstances.

Hansell thinks the same is true of the diversity issue and that many people would find the imposition of government oversight “objectionable.”

“I think everyone is uncomfortable with quotas. It’s too blunt a tool,” she said.

Even Trudeau shied away from anything that resembled a quota in the legislation. When Economic Development Minister Navdeep Bains introduced the bill, he said it would “contribute to an inclusive economic growth agenda” but would not unduly burden business.

The bill was deemed sufficiently benign by the Conservatives that they supported it – pointing out much of it was based on their economic action plan.

The “comply or explain” model has already been adopted by the Canadian Securities Administrators, covering most of Canada’s publicly traded companies.

The dissenting senators point out the results have been unspectacular over the past few years — 14 per cent of board seats are now occupied by women, up from 11 per cent in 2015.

Only 1.1 per cent of board members are Indigenous, 3.2 per cent have disabilities and 4.3 per cent belong to visible minorities.

As a share of the population, all four groups are under-represented (women and girls make up 50.4 per cent of the Canadian population; three per cent are Indigenous; 19.9 per cent are visible minorities and 13.7 per cent report some kind of disability).

Smart companies are moving toward board representation that more accurately reflects their shareholders and customers.

But we are veering into dangerous territory when we reject the notion of meritocracy as a mechanism that merely re-inforces male privilege.

Change is happening before our eyes, even if it is not as rapid as some might like.

But it is simply not the role of government to dictate who should be running the nation’s businesses.

Source: John Ivison: Senate amendments to gender diversity bill set to test Trudeau’s feminist principles

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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