Gender diversity on boards – Still not good enough

SHARE votes against nominating committees who fail to make progress on diversity

By Catherine Smith, SHARE’s Proxy Voting Services Manager and Senior Research Analyst

In 2015, the Ontario Securities Commission, or OSC, implemented a “comply or explain” rule that companies listed on the Toronto Stock Exchange would have to either disclose information related to gender diversity, including the number of women on their boards and their policy on diversity, or explain why they were not doing so. The OSC’s first-year review of the new rule found that 50% of boards still had no women, and only 14% had a written diversity policy. Howard Wetston, then chair of the OSC, chided Canadian companies, saying that overall their compliance with the new rule was “simply not good enough.”

In October 2017, the Canadian Securities Administrators reported that women held just 14% of director positions at companies listed on the TSX, an increase of only 3% from 2014. Others report even worse results. The Canadian Board Diversity Council reported that women occupy 22.6% of the board seats of companies on the Financial Post 500, an increase of 1% over the previous year. The law firm Osler reported that 26% of the companies in the TSX60 had women directors in 2017, an increase of 1.4% from 2016.

When voting proxy ballots, SHARE votes against the nominating committees of boards with no female directors and no diversity policy. We voted against directors at 21 companies for this reason during the second quarter of 2018, including the Boston Pizza Royalties Income Fund, Secure Energy Services, and New Look Vision Group.

Constellation Software is another company that has no women on its board or in its executive ranks. The Fonds de solidarité FTQ filed a proposal with the company, asking it to adopt a formal policy on board diversity and plans for increasing the number of women on its board and in its upper management. The proposal won the support of 49.16% of Constellation’s shareholders at the company’s annual meeting on 26 April. Following the vote, the company asked SHARE for examples of board diversity policies and best practices. This is an encouraging sign that the company may develop its first diversity policy.

Last month, SHARE organized a group of Canada’s largest pension funds and asset managers to meet with the Chair and staff of the OSC to discuss the next steps for the Commission’s Women on Boards initiative, as well as other issues. SHARE suggested some next steps for gender diversity in its submission to the OSC, following the commission’s request for input on its Statement of Priorities for 2018-19.  On 5 July, the OSC announced that disclosure of gender diversity at board and senior management level will be one of its priorities for the coming year.

In the meantime, the federal government has stepped in. Bill C-25, which passed and received Royal Assent on 1 May, tosses out the “comply or explain” rule in favour of requiring companies to disclose the numbers of female and visible minority directors on their boards and in senior management. The requirement will be part of new amendments to the Canada Business Corporations Act. Details about the information companies will have to disclose will not be known until the regulations for the act are drafted. However, proposed regulations include requiring companies to disclose the numbers of Indigenous people and people with disabilities, as well as women and visible minorities on corporate boards and in executive positions.

Gender diversity can make a real difference on issues that matter to investors. Studies have consistently shown that companies with women on their boards and in executive positions tend to have more effective corporate governance and better long-term outcomes than companies without women on their boards or in the C-suite. Gender diversity in corporations also promotes greater fairness and equality in society as a whole, which ultimately benefits everyone.

Written By:


Looking to interview a SHARE staff or board member for an upcoming article or report? Send us an email at to get in touch.

More By This Author