Written by guest blogger, Kim Melissa Willey.
Women remain woefully under-represented on the boards of Canadian companies two years after the Ontario Securities Commission (‘OSC’) changed its disclosure rules to make gender parity a priority[1]. At last count, women held only 18% percent of board seats in Canada’s largest public companies.[2] Admittedly, we are seeing baby steps as the number of women on boards continues to creep upwards, but decisions of Canada’s largest economic entities are still made by a group that does not reflect the population. Obviously, cultural diversity is also a significant part of this discussion, but cultural diversity should not push gender parity to the back burner. Women on boards are measurable in a way that cultural diversity is not, and, consequently, gender initiatives can bring faster transformation.
Women remain woefully under-represented on the boards of Canadian companies two years after the Ontario Securities Commission (‘OSC’) changed its disclosure rules to make gender parity a priority[1].
In my article in the Canadian Journal of Women and the Law[3], I analyze the OSC’s approach to gender diversity from a behavioural economics perspective. Gender bias is deep seated in our business communities even among the most well-meaning and socially attuned people. Law and regulation can help uproot these deep seated and often unconscious gender biases, but the OSC’s approach does not do enough.
The OSC implemented a disclosure regime requiring large Canadian listed companies – TSX Venture Exchange companies do not count – to annually tell investors what they are doing about gender parity in the board room and in senior management. This is supposedly a ‘comply and explain’ approach meant to publically pressure companies towards gender parity. An alternative approach is quotas, which are popular in some European countries and can be an effective legal tool to increase the number of women on boards. But quotas have been rejected in Canada mainly based on concerns of ‘tokenism’, where board seats are filled with women with minimal influence and potentially less qualifications for the role.
Although quotas may not be a viable option to diversify Canadian boardrooms, the current OSC approach is far too soft to effect change. It is in practice an ‘explain and explain’ approach. Merely asking what companies are doing does not set a standard for behaviour. What is needed instead is a true ‘comply and explain’ approach. The OSC should state that all issuers – not just TSX companies – should have gender parity by a specific date – or stagger it, for example, 30% by 2020, 40% by 2022, and 50% by 2025. Boards should then be required to fully describe the steps they are taking to achieve this goal, or explain why they are not. Anything less is selling Canadian women short.
References
[1] Canadian Securities Administrators (CSA), Multi-Lateral Canadian Securities Administrators Amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices (Canadian Securities Association, 15 October 2014).
[2] http://www.osc.gov.on.ca/documents/en/Securities-Category5/sn_20160928_58-308_staff-review-women-on-boards.pdf
[3] “‘Bringing Canadian Women on Board’: A Behavioural Economics Perspective on Whether Public Reporting of Gender Diversity Will Alter the Male-Dominated Composition of Canadian Public Company Boards and Senior Management“, Canadian Journal of Women and the Law, Volume 29, Issue 1 (2017).
Kim Willey is a PhD candidate in the Faculty of Law at the University of Cambridge. Kim has a B.A. (Hons), LL.B. and M.B.A from the University of Victoria and a Masters in Law from Osgoode Hall at York University in Toronto. Kim’s research is in the area of corporate governance and accountability. Prior to starting her PhD research, Kim had over a decade in private practice as a corporate lawyer advising clients on merger and acquisition transactions, both in Bermuda and Canada.
Willey’s article, “‘Bringing Canadian Women on Board’: A Behavioural Economics Perspective on Whether Public Reporting of Gender Diversity Will Alter the Male-Dominated Composition of Canadian Public Company Boards and Senior Management“, appears in Volume 29, Issue 1 of the Canadian Journal of Women and the Law, available to read here.
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