Ontario’s provincial government is stepping up its push to improve gender diversity on corporate boards, calling on companies to set targets for female representation.
The government announced on Tuesday that it’s adopting a target of 40% women for all appointments to every provincial board and agency. It is also calling on private sector businesses to establish a 30% target for their boards by the end of 2017 and says that they should commit to meeting those targets within three to five years.
These measures follow a report released on Tuesday by Catalyst Canada, which argues that more needs to be done to improve gender diversity at the highest levels of government and business in Canada. The report notes that currently only about 20% of corporate directors are female, and that half of the Toronto Stock Exchange (TSX)-listed issuers have zero female directors.
“Canada continues to lag behind other developed nations in terms of gender balance on corporate boards,” the Catalyst report says, adding that women continue to be underrepresented on boards and in senior management of Canadian companies.
Although there are signs of progress, “much bolder actions are required” to drive greater change, the report suggests. To that end, it makes 11 recommendations for accelerating that progress, including encouraging issuers to set specific targets, adopting mechanisms to facilitate turnover on corporate boards, and establishing written policies to increase the representation of women on boards. These measures “could help drive meaningful progress toward parity,” the report adds.
In response, Ontario’s provincial government says it has accepted all of the report’s recommendations and it announced the creation of a steering committee to provide input on implementing the recommendations.
The committee includes Maureen Jensen, chairwoman and CEO of the Ontario Securities Commission (OSC), and Victor Dodig, president and CEO of Canadian Imperial Bank of Commerce, along with provincial Finance Minister Charles Sousa and Minister Responsible for Women’s Issues Tracy MacCharles, who are co-chairing the committee.
“Ontario played a leadership role in developing, and was among the first jurisdictions to adopt, comply or explain gender diversity disclosure requirements, which were also adopted by nine other jurisdictions across Canada,” notes Ontario premier, Kathleen Wynne, in a statement referencing new rules the OSC has championed that step up disclosure requirements on public companies in a bid to encourage improvements in diversity.
“We need to keep building on this success — establishing these two new gender diversity targets will help to pave the way for more women to sit on boards of directors and take on executive roles,” she adds. “I encourage other businesses and corporations to follow our government’s example and become leaders in gender equality in the workplace.”
“Implementing our ‘comply or explain’ disclosure requirements has been seminal over the past year in increasing the representation of women on boards of directors and in executive officer positions on TSX-listed companies,” adds Jensen in a statement. “I look forward to working with the steering committee to focus on ways to increase diversity at the top of the province’s leading organizations.”
The Catalyst report recommends that the OSC continue to track, and publish, data on board diversity on an annual basis. If sufficient progress toward a 30% target is not evident, the government should consider “more stringent legislative or regulatory approaches,” the report adds.
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