This year, Canadian public companies may face renewed pressure to include more women on corporate boards, says an EY report.
This is crucial, it adds, since “the Canadian Board Diversity Council has estimated that, at the current…rate, Canada’s boardrooms will not reflect gender parity until 2097.”
EY says that the Ontario Securities Commission recently “proposed a number of amendments that would require TSX-listed and other non-venture issuers reporting in Ontario to include specific disclosures” about the composition of their boards in annual proxy circulars. Companies would have to be clear about details such as:
- director term limits or provide explanations for the absence of such limits;
- policies regarding the representation of women on their boards or give explanations for the absence of such policies; and
- the objectives and key provisions of new policies, such as the measures taken to ensure proper implementation and the progress that’s made on achieving objectives.
The proposal is about “helping issuers tap into a pool of talented and capable resources currently under-represented on today’s boards and senior management,” says Howard Wetston, chairman and CEO of OSC.
EY supports such proposals since, as its report suggests, Canadian companies aren’t leveraging the benefits of having diverse teams and boards. It says a Catalyst 2014 survey found that, “While women make up 47.3% of Canada’s workforce, across Financial Post 500 companies women hold only 14.5% of board seats” and only 5.1% of CEO positions.”
“The U.S. holds a marginally better record, with 16.9% of board seats in Fortune 500 companies held by women,” says the report.
What’s more, a 2013 OSC survey found that out of 1,000 TSX issuers, more than half (57%) had no women directors and 53% admitted women held fewer than 10% of executive office positions. Further, only 3% had three or more female board members, and only 3% had females leading their boards.
To help improve diversity at companies, EY suggests executives review the OSC proposal, as well as adopt practices such as rewarding the achievements of all staff and setting achievable, long-term goals to fill equality gaps.
Read more on the three factors holding Canada back from achieving corporate parity.
Also check out: