Securities regulators urged to make gender diversity policies mandatory

Hard to argue with greater transparency and reporting as a way to encourage change, which should also apply to visible minorities:

Canadian securities regulators should make gender-diversity policies mandatory for companies on the Toronto Stock Exchange after a majority of companies rejected voluntary standards this year, according to Women’s Executive Network founder Pamela Jeffery.

Ms. Jeffery, who heads the Toronto-based advocacy organization for women in business, told an Ontario Securities Commission round-table forum that Britain’s corporate governance code requires companies to report annually on their diversity policies, and the country has seen rapid improvement in the proportion of women on its boards and in senior executive roles.

“Given that only 14 per cent of [Canadian] issuers have disclosed the adoption of a written policy, we’d like to see issuers required to disclose a written board and executive board diversity policy,” Ms. Jeffery said.

Canadian companies should also be required to report annually on their internal targets for women, she said.

The OSC forum Tuesday was organized to discuss compliance to date with new voluntary standards, introduced this year, that recommend companies should create gender-diversity policies to get more women in senior roles.

A report released Monday by securities regulators shows only 14 per cent of 722 TSX-listed companies have created formal diversity policies in the wake of the new standards, while 65 per cent said they have decided not to have a policy and a further 21 per cent reported only informal policies or policies that do not mention gender diversity.

Osgoode Hall law professor Aaron Dhir, who specializes in issues of corporate diversity, told the OSC forum his research shows Australia and Britain both saw significant increases in the proportion of women on their boards after they introduced new reporting standards.

In Australia, for example, the proportion of women on ASX 200 boards grew to 20 per cent in 2014 from 8 per cent in 2011 after regulators introduced a rule similar to Canada’s new standard. In 2011, 61 per cent of Australian companies reported having a diversity policy, which has grown to almost 100 per cent this year, Prof. Dhir said.

Canada’s new standard is one of the best Prof. Dhir said he has seen compared to diversity rules in other countries like the United States, but companies need time to respond. He is “cautiously optimistic” more will adopt diversity policies in coming years.

Source: Securities regulators urged to make gender diversity policies mandatory – The Globe and Mail

Don Cayo: Time for corporate boards to take diversity seriously

More of corporate board diversity (or lack thereof) and the work of Pamela Jeffery of the Canadian Board Diversity Council to change this:

If you, like me, think most big Canadian companies have too few women on their boards of directors, then what should we make of the under-representation of aboriginals and other visible minorities?

The numbers for these two groups are much worse. To compare:

  • Women comprise 50.4 per cent of the Canadian population, or 51 per cent in Metro Vancouver. They hold just eight per cent of the executive positions in Canada’s 500 largest companies, but their representation on boards of directors has inched up and now is 17.1 per cent.
  • Aboriginals comprise 4.3 per cent of Canada’s population, although less than half that in Metro Vancouver. They hold 0.8 per cent of big companies’ board seats — a percentage that has been stalled for years.
  • Other visible minorities comprise 19.1 per cent of the population, but the number is much higher and growing briskly in Metro Vancouver. It had reached 45.2 per cent, mostly people of Asian extraction, by 2011. In 2010, members of this group held 5.3 per cent of big companies’ board appointments, but by 2014 this number had slipped to two per cent.

Pamela Jeffery, the founder of both the Toronto-based Women’s Executive Network and the Canadian Board Diversity Council, is pleased to see at least women making progress — although not enough, in her view, and not at a fast enough rate.

But she has a sinking feeling that women’s successes in getting seats at the boardroom table may come at the expense of aboriginals and other visible minorities. When boards decide to recruit beyond their usual source of new directors — that is, their old boys’ network — the easy way is to find a well-qualified woman and then look no further.

So, to tackle the worst problem first, Jeffery is working with the Canadian Council for Aboriginal Business to beat the drum for more aboriginal representation on boards that oversee Canada’s biggest companies. The council has held back-to-back summits, one in Vancouver and one in Calgary, to engage business leaders on the issue.

Jeffrey doesn’t advocate quotas, and neither do I. The problem is that quota-driven recruitment can lead to candidates being selected solely on the basis of their ethnicity, not what they can bring to the table.

But boards undermine their own potential effectiveness when all their members are near clones of each other, with similar backgrounds, experience and attitudes.

Diversity can bring new insights to the table — new ways of looking at under-served markets, whether geographically or demographically distinct from the tried-and-true, as well as ties to new talent pools that a company could tap.

Don Cayo: Time for corporate boards to take diversity seriously.

Diversity on boards means more than gender

More on corporate board director diversity (or lack thereof) by Anita Anand and Vijay Jog (see earlier post Women gain on corporate boards but visible minority representation dips):

In light of these arguments in favour of board diversity and given the ever changing mix of the Canadian population in general, one might think visible minority directors would be more present on Canadian corporate boards. But this is not the case. We have found they represent 5.5 per cent of directors of TSX-listed firms (and less if certain foreign-owned firms are excluded). Visible minorities represent only 4.2 per cent of those graduating from director-education programs, some of whom have previous board experience as an admission requirement.

The percentage of women is much higher in both cohorts; white women comprise 26 per cent of graduates of director programs but only 12 per cent of public company board members. Thus corporate boards have much fewer visible minority directors relative to both white women and white men.

But does diversity even matter? Prior academic research has been somewhat inconclusive. We find that firms with white male boards do not show significantly better performance than firms with boards comprised of females and visible minorities. We do not claim that these results show causality since it is possible that firms that demonstrate superior stock performance are forward-thinking or that investors respond positively to such proactive measures. At the very least, our results suggest that there is no performance deterioration by having a diverse board.

Visible minorities contribute significantly to GDP and represent a high growth segment of the population. Let’s open up the conversation about board diversity beyond gender parity and consider whether boards should bear some demographic similarity to the society in which the corporation operates. Corporate Canada will need to face this issue at some point: why not now?

Diversity on boards means more than gender | Toronto Star.

Women gain on corporate boards but visible minority representation dips

Incredibly low number for visible minorities:

Women have climbed slowly but steadily in recent years from 10.9 per cent of directors in 2001 to 13.7 per cent by 2009 and 15.6 per cent in 2013, the study shows.

However, visible minorities hold just 2 per cent of board seats, a decline from 5.3 per cent in 2010, and people who report having disabilities fill just 1.4 per cent of board seats, down from 2.9 per cent in 2010. Aboriginal directors hold 0.8 per cent of board seats, a number unchanged from 2010.

Diversity council founder Pamela Jeffery said it is disappointing to see a decline in visible minority directors while Canada’s population – especially in major cities where head offices are located – becomes steadily more diverse.

“I think it underscores what we know, which is that most board seats are filled in a less-than-desirable way, with board members sitting at the table asking each other who they know,” she said. “Sadly, aboriginal people or people with disabilities are not in their networks.”

Ms. Jeffery said she is encouraged, however, that the rate of increase for women on boards has accelerated, growing by 1.5 percentage points between 2013 and 2014 after increasing by just 0.32 percentage points in each year on average between 2001 and 2012.

However, Ms. Jeffery said the level of gender diversity remains low compared to many other major countries. Britain, for example, will have 25 per cent women on boards of its top 100 companies by next year, she said.

Women gain on corporate boards but visible minority representation dips – The Globe and Mail.