Recent examples of low board diversity in Canada highlight the difficulty faced by large companies striving to avoid discrimination.
For example, some three in 10 board members at Canadian banks are male and entirely white. Furthermore, the number of women on boards at Canada’s largest banks is just 3% of total directors.
Great ideas need time – if not to be fully formed. So in less than four years, the federal government has opened the doors to Canada’s financial institutions, making it easier to meet national diversity benchmarks in employment categories like board members, senior executives and compliance officers.
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The government has worked closely with the bank and financial sector to make Canada’s banking sector a leader in diversity and gender equality. Now the next challenge is to get everyone else in Canada’s non-financial industries – including non-financial corporations – on the same track.
Recent developments show that there are more than a few roadblocks.
In December, Ontario’s Information and Privacy Commissioner revealed that six of the eight companies included in a public databank about diversity are all controlled by a single family. This review unearthed weak support for diversity and an insufficient commitment to develop strong support for equal rights and value inclusion.
Last month, the Quebec Court of Appeal overturned a Quebec human rights tribunal ruling that women should occupy two of the 11 board seats in a publicly-listed company. In the eyes of the tribunal, this was a violation of rights to equality and freedom of association. No women have sat on the board in the five years since this ruling was made.
It may be important for the federal government to extend the hiring target for women to include board members as well.
And will the federal government also need to ensure that no company that is not reaching its new target for board diversity will be permanently blocked from being added to the public databank? Or will these companies be able to avoid being included, regardless of diversity efforts?
Will future public censure and government oversight prevent complacency and progress?
Resistance to the public databank will also undermine progress in diversity in women-owned businesses. A 2015, TD Bank survey of Canadian small businesses found that nine in 10 (90%) said they were working to add at least one woman as a business partner to their company. But just 52% said they had a woman as a board member. Clearly the institutions that actually hold companies accountable are failing to keep pace.
Compounding this issue is the fact that when it comes to hiring people based on their perspectives, the gender gap remains as large as it has for years. Women were 46% less likely than men to be hired for higher-level roles in Canada’s large firms.
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As advocates and research institutions, we have a vested interest in ensuring that public companies, government bodies and private sector companies do everything they can to reach their diversity targets. That’s why data gathering from diverse sources like the financial sector is so important. If each organization reports data only to their boards and officials, the progress achieved is less likely to be reported.
What’s more, such data can help investors and corporate boards identify where the good work is taking place. This is especially true for institutional investors, whose investments include shares in Canadian public companies. Financial institutions invest a significant portion of their market capitalization in stocks, especially stocks of Canadian companies. Their customers, beneficiaries and consumers are also citizens of Canada. So their research reflects the communities they work in and interact with on a daily basis.
Without such data, Canadians and Canadian businesses will have less faith in the ability of Canada’s public corporations to achieve diversity goals. We need to make sure these standards are high enough that – no matter what the need – they are regularly met.
Canada can be a global leader in creating a truly diverse workplace. It will require the participation of a diverse array of people to accomplish this. For example, millennials will account for 40% of the workforce by 2025. They are shaped and influenced by diversity in their schooling, workplace and social lives.
Countries that are most integrated and successful can tell their own story of diversity through our stories. So Canada can set an example to others by tackling the diversity gap head-on.