On June 7, 2016, the Ontario government announced that it has
accepted all 11 recommendations set forth in Catalyst Canada's
report, Gender Diversity on Boards in Canada:
Recommendations for Accelerating Progress (Report).
Catalyst Canada is a non-profit organization whose mission is to
accelerate progress for women through workplace inclusion. The
Report was commissioned by the Government of Ontario and is
intended to advance gender balance on boards through providing
recommendations to companies and business leaders as well as the
To provide input on implementation of the Report's
recommendations, a steering committee was established and will be
co-chaired by Ontario's minister of finance and minister
responsible for women's issues and include the chair and chief
executive officer of the Ontario Securities Commission (OSC), among
The Report notes that while some indications of momentum exist,
with 15% of TSX-listed issuers having added one or more women to
their boards between the 2014 and 2015 proxy seasons, there is
still much progress to be made in terms of gender balance, as women
currently comprise 20.8% of the members of such boards and half of
TSX-listed issuers do not have any women on their boards (see our
October 2015 Blakes Bulletin: CSA Findings from Gender Diversity Disclosure
Requirements Review Released).
RECOMMENDATIONS CONCERNING PUBLIC COMPANIES
The Report builds on the "comply or explain" gender
diversity regime introduced for the 2015 proxy season (see our
October 2014 Blakes Bulletin: Just in Time for 2015 Proxy Season: Disclosure
Requirements for Gender Diversity, Director Tenure) by
recommending that TSX-listed issuers set specific gender diversity
targets by the end of 2017 and achieve them within three to five
years. For issuers that currently have at least one woman director,
the aim is to have 30% women board directors, and for issuers that
currently have no women directors, the aim is to have at least one
female board director.
The Report recommends that Ontario issuers establish written
policies to describe their specific plans for increasing female
board representation and use at least one board renewal mechanism,
such as director term or age limits. It also recommends that
issuers review board recruitment policies to ensure that women,
including women from diverse communities, comprise at least 50% of
potential board candidates and at least 50% of the interview pool
for each open board position. Beyond executive positions, the
Report recommends that issuers address gender equity at all levels
of their organizations in specified, tangible ways, such as
removing restrictions on external board service, investing in
inclusive leadership training and implementing pay transparency
policies, among others.
The Ontario government accepted all of the recommendations in
the Report, including establishing a target that, by 2019, women
comprise at least 40% of all appointments to every provincial board
and agency. The Ontario government has also committed to providing
ongoing reinforcement of the Report's recommendations to
issuers and business leaders and will be launching an
action-oriented public awareness campaign to encourage Ontario
businesses to follow the Report's recommendation of appointing
30% women to their boards by the end of 2017. Ultimately, if
sufficient progress is not made, particularly toward the 30%
target, the Ontario government has pledged to consider more
stringent legislative or regulatory approaches.
Although the presence of women on corporate boards has increased
over the last decade, Canada lags behind other developed nations.
The Report is hopeful that encouraging issuers to set specific
targets, implement at least one mechanism to facilitate board
renewal, and establish a written policy to increase the
representation of women on boards will accelerate the pace of
progress toward gender balance on boards and in executive ranks.
Ontario public companies (including TSX-listed issuers) should take
notice of the Ontario government's initiative in driving this
concern forward and expect to see further regulatory developments
should the current voluntary, "comply or explain" regime
yields unsatisfactory progress.
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