Nearly one year after Canada enacted its diversity disclosure requirements, Canadian public companies are making slow progress in improving diversity on their boards and at the executive-officer level, a new report by law firm Osler finds. The report also showcases several corporate standouts, providing a benchmark for chief ethics and compliance officers in companies across all industries and countries to meet.
As of Jan. 1, publicly listed, federally incorporated companies governed by the Canada Business Corporations Act (CBCA) had to start providing in their annual meeting materials to shareholders enhanced disclosures about the company’s diversity policies and practices relating to its board of directors and senior management team. Specifically, companies must disclose, at a minimum, information on the representation of the following four “designated groups,” as defined under the Employment Equity Act: women, Aboriginal persons, members of “visible minorities,” and persons with disabilities. Companies also have the option to voluntarily disclose information about other groups they feel contribute to their diversity efforts—such as age, veteran status, and sexual orientation.
Osler’s diversity disclosure practice report reveals room for improvement. According to the findings, women hold 21.5 percent of all board seats among TSX-listed companies that disclosed the number of women directors on their boards, an increase of almost 3 percent compared to 2019.
Canada’s larger companies continue to lead the way, with women holding 31.5 percent of board positions among the S&P/TSX 60 companies and 28.3 percent of board positions among the 221 companies included in the S&P/TSX Composite Index. All-male boards continue to decline, representing 18.5 percent of the TSX-listed companies.
At the executive-officer level, however, the proportion of women executive officers “has remained largely unchanged since 2015, and under 10 percent of TSX-listed companies have targets for women executive officers,” the report stated.
A separate report conducted in March by Catalyst Canada, in collaboration with the 30% Club Canada, revealed similar findings. According to the report, “Women in Leadership at S&P/TSX Companies,” women held 28 percent of board seats among the 234 S&P/TSX Composite Index companies reviewed as of December 2019 but comprised only 18 percent of executive teams.
Regarding other diversity groups, only 5.5 percent of the 217 disclosing CBCA company directors are visible minorities, according to the Osler report. Among the 2,023 board positions of the 270 CBCA companies that provided full or partial disclosure on their practices before July 31, only seven positions were held by Aboriginal peoples, and only six positions were held by persons with disabilities.
The report also found most TSX-listed companies (65 percent) have written board diversity policies. “This year, we noticed a significant increase in companies disclosing that their board policy also considers other diversity characteristics—the most common of which was ethnicity/race, which was identified approximately 57.5 percent of the time,” Osler said in its report.
Osler’s report showcases numerous companies in 2020 that have boards and executive-officer positions comprised of at least 50 percent women. “We showcase these companies and practices to show that with sufficient leadership and focus, it is possible to achieve gender parity and to inspire others to consider adopting practices that may increase diversity within their company,” Osler said. Leading the way among TSX companies in 2020 was Sienna Senior Living, where 83 percent of the executive officers are women.
Canadian National Railway Company was recognized as an innovative leader in the indigenous peoples space, while construction company Aecon Group received a nod for its commitment to supporting the LGBTQ2+ community.
Other areas where corporate standouts were highlighted include recruitment; mentorship programs; networking programs; training; diversity and inclusion committees; flexible work arrangements; promoting a change in culture and removing systemic barriers; monitoring activities; pay-equity initiatives; and more.