Closing the gap

Bill promoting boardroom and senior management diversity lacks teeth

Senator argues gender equality can’t be left to self-regulation
Photo: The_Warfield

Despite the world’s perception of Canada as a leader on women’s rights and multiculturalism, this country’s corporate leadership remains overwhelmingly dominated by white men.

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And even with a government elected with a strong mandate on feminist and diversity issues, it has taken them almost a year to introduce legislation addressing this deficit.

But its proposed solution, Bill C-25, which is currently under review at the Senate, is far too timid to put a dent in the problem.

The proposed regulations include a “comply-or-explain” approach, where federally registered, publicly traded corporations are asked to disclose to shareholders their diversity numbers and policies. But “asked” is the key word here. If they choose not to, they only have to explain why not.

Optional self-regulation does not work.

In fact, this is already the practice for corporations listed on the Toronto Stock Exchange — and unsurprisingly, it has had little effect.

If Canada wants to make real progress during the next decade, the adoption of diversity policies should be made compulsory

Three years after the TSX moved forward with its own comply-or-explain rule, board seats occupied by women only rose from 11 per cent to 14.5 per cent. As to women in senior management roles, their percentage sits at 15 — and has since 2015. If gender balance is truly the goal, this isn’t good enough.

And regarding non-gender diversity, the numbers are in fact sliding. According to the Canadian Board Diversity Council, from 2015 to 2016, the rate of Financial Post 500 directors belonging to visible minorities decreased from 7.3 to 4.5 per cent, while the rate for Indigenous Canadians slid from 1.3 to 0.6 per cent.

If Canada wants to make real progress during the next decade, the adoption of diversity policies should be made compulsory, not optional, and there should be penalties for corporations that don’t comply. Furthermore, these policies will need to provide a clear path forward with detailed objectives.

While imposed quotas often get a bad rap, they’ve actually shown convincing results in a number of European countries. In Canada, corporations should at least be required to set clear target percentages of women and diversity on their boards and for senior management.

Corporations should be compelled to set targets for three core categories of non-gender diversity in Canadian society: visible minorities, people living with disabilities and Indigenous peoples.

Moreover, an inclusive approach is just good business. With 60 per cent of university graduates being women, the pool of qualified women to pick from will continue to expand. Other forms of diversity also demonstrate proven performance benefits.

However, while addressing non-gender diversity is more complex, making progress on this front remains both ethical and feasible.

Corporations should be compelled to set targets for three core categories of non-gender diversity in Canadian society: visible minorities, people living with disabilities and Indigenous peoples. They would still have the option to expand targets to other types of diversity reflecting their markets and communities.

But governments alone can’t tackle the gap in diversity in the corporate world.

Deeper cultural change will be needed.

Mentorship for instance is key to encouraging the next generation of women and visible minorities to take up senior roles. Flexible work arrangements and, of course, a more equal share of domestic duties are also critical to prevent women from sacrificing their paths to leadership.

There’s no denying that “leadership qualities” are often still defined by white men, for white men. It seems all too apparent that for businesses to leave their comfort zones and widen their searches for talent, government will need to push a little harder.

Paul J. Massicotte is a senator from Quebec.

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