Visible minorities make gains on boards
Canadian council’s top 50 list helps foster recruitment of diverse candidates
One of the first reasons often given to explain why the diversity among corporate directors does not match the composition of the Canadian population is that there is a shortage of qualified candidates.
To combat this view, the Canadian Board Diversity Council began compiling an annual list in 2012 of 50 diverse candidates who might not otherwise be on the radar of board recruiters.
By 2016, the CBDC says, its Diversity 50 list had led to 29 appointments to the boards of Fortune 500 and FP500 companies.
This week, the latest list was rolled out, and with a notable change: Nearly 30 per cent of the board candidates are visible minorities, up from 12 per cent in 2016. That is notable because such lists tend to focus on women as the key demographic targeted in the push for greater board diversity.
Only 4.3 per cent of directors currently on Canadian boards self-identify as a visible minority, according to an annual report card released in December by PhaseNyne, parent company of the To- ronto-based CBDC.
“Study after study has shown that diversity increases a company’s bottom line and leads to better decision making,” said Sherri Stevens, chief executive of PhaseNyne. “By giving corporate boards the tools they need to locate these successful individuals, organizations can improve their performance for the benefit of their customers, employers, shareholders and, in the process, for Canada as a whole.”
PhaseNyne says 24 participating executives from corporate Canada, including chief executives, endorsed the process behind the selections for the Diversity 50 list. The latest list contains six men, and two individuals who identify
as members of the LGBTQ community.
Anita Anand, a law professor at the University of Toronto whose focus includes corporate governance, said resources for boards such as the Diversity 50 list are an important component for “bridging the gap” between boards seeking to fill positions and increased diversity.
“By referring to these lists, boards and their nominating committees will see a broader conception of diversity in play. This broader conception will hopefully percolate into the boardroom,” she said.
Board diversity, particularly gender diversity, has become a hot topic in recent years among Canadian governments and regulators.
The federal government is currently overhauling the Canada Business Corporations Act with proposed provisions related to board diversity.
The Ontario Securities Commission, followed by other provincial capital markets regulators, established a “comply or explain” regime in 2014 to track gender diversity efforts and policies at publicly traded companies.
In 2015, the Canadian Coalition for Good Governance, backed by some of the country’s largest institutional investors, called the level of gender diversity at Canadian public companies “stubbornly low.”
This led the CCGG, which had publicly supported increased gender diversity on boards, to establish a formal policy.