Shareholders push Canada’s boardrooms to embrace diversity

As companies issue new proxy circulars in time for their annual general meetings, SHARE is closely watching to see whether corporate Canada has improved its dubious record on board diversity.

Have admonishments from securities regulators and shareholders pushed more companies to adopt board diversity policies and goals? More importantly, will we see more female candidates for board seats at 2016 AGMs?

This will be the second year that Canadian companies will have to report on how many women are seated on their Boards. In 2014, the Ontario Securities Commission and most of the members of the Canadian Securities Administrators adopted a “comply or explain” rule on gender diversity for listed companies. The rule requires companies to disclose how many women directors and executives they have, their policies on gender diversity, and any targets they have for increasing the number of female directors and executives – or to explain why they were not doing these things.

A review conducted by the CSA of 81% of the companies listed on the Toronto Stock Exchange at the end of July 2015 found that 51% of the companies it studied still had no women on their boards and 40% had no women in their executive ranks. Only 15% of the companies had added women directors to their boards in the previous year. Of the companies reviewed, only 14% disclosed their diversity policies and 65% said they had decided not to adopt a diversity policy at all.

If this year’s results are not significantly better, enhanced regulatory measures may be needed to drive improvements. In the meantime, shareholders should be engaging with company boards to promote diversity in corporate boardrooms and executive suites.

The Meritas Jantzi Social Index Fund, for example, has worked with SHARE to file a shareholder proposal at Restaurant Brands International (RBI) asking the company to develop a board diversity policy and report on its timelines, process and activities for increasing gender diversity on its board. Before its merger with Burger King to form Restaurant Brands, Tim Hortons had 3 women on its board. Restaurant Brands has none. Shareholders will vote on the proposal at RBI’s upcoming annual meeting on June 9th.

SHARE also uses proxy voting to drive change, specifically in voting on boards of directors. If a company does not have any women directors and does not have an adequate diversity policy, we will vote against the members of the board’s nominating committee.

Building on this, SHARE recognizes that diversity is not limited to gender. Following last year’s recommendations of the Truth and Reconciliation Commission, SHARE has initiated a new Business and Reconciliation engagement stream asking Canadian companies to include Aboriginal heritage as a diversity criteria to address the abysmally low representation of Aboriginal people on corporate boards of directors.

SHARE is committed to engaging with companies to enhance the case for a wider variety of perspectives in decision-making and will continue to encourage Canada’s corporate boardrooms to embrace diversity.


The full text of the CSA’s review can be found here: Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices

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