A collection of Canada’s largest institutional investors is calling on corporate Canada to boost gender diversity, with the aim of reaching 30% female representation on the boards and executive teams of the companies that comprise the S&P/TSX composite index by 2022.
The group, known as the Canadian 30% Club Investor Group, includes major pension fund managers, such as Canada Pension Plan Investment Board, OMERS, and the Ontario Teachers’ Pension Plan, along with leading asset managers, such as RBC Global Asset Management, BMO Global Asset Management, CIBC Asset Management, and AGF Management Ltd., among others. Collectively, the 16-member group manages $2.1 trillion in net assets.
In a joint investor statement published Thursday, the group calls on companies to do more to improve diversity, and says that investors should help drive this effort.
Among other things, the group demands:
- companies properly consider gender as part of the recruitment and hiring process;
- investors advocate for action on diversity at the companies they invest in; and
- investors consider companies’ efforts when voting on director slates and other proxy issues.
The group points to research that finds gender diversity being associated with greater corporate performance. In particular, research by Credit Suisse has found that companies with higher levels of female representation, “have experienced higher stock market return, higher returns on equity, higher valuations and higher payout ratios,” the group says in its announcement.
The group it is targeting the 30% mark, because, it believes that this represents the level, “at which critical mass is achieved and contributions of a minority group cease being representative of that particular group and begin to be judged on their own merit.”
“We know that greater diversity leads to better governance and business outcomes, and it is in the best interests of investors to press for change for the benefit of their clients, shareholders and the economy,” says Victor Dodig, president and CEO at CIBC, and chairman of 30% Club Canada, in statement.
“The investor statement is an important commitment addressing the significant role investors play in moving the dial on gender balance in the boardroom and in senior management, holding companies accountable for real change,” he adds.
Despite the fact that research has found that greater diversity is associated with stronger results, the firms note that corporate Canada has been slow to improve female representation at the highest levels. Last year, a review by the Canadian Securities Administrators (CSA) found that just 12% of board seats were occupied by women.
The latest edition of that research by the CSA is slated to be released in the next few weeks
The Ontario Securities Commission announced it will host a roundtable on Oct. 24 to examine the results of the latest review, along with other diversity-related issues.
Read: OSC to discuss results of gender diversity review
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