Diversity the key to success
Re: Assault on the boardroom. Terence Corcoran, Jan. 17 Terence Corcoran accuses the Liberal government of launching an “attack on corporations.” The weapon? Bill C-25: legislation that asks corporate boards to become more diverse and have greater gender equity.
Our government has long been a champion of inclusion and diversity. We’re proud of it. We believe Canada’s diversity is our strength and that inclusivity is the secret to great ideas, innovation and growth. It is not only a social value, but an economic one.
In the boardroom, as in life, multiple perspectives lead to innovative thinking and better performance. In short, there’s money in gender equality and diversity and we need to take advantage of that.
An established body of research shows that businesses with at least one woman on the board deliver higher average returns on equity and better average growth.
Bill C-25, building on efforts from a number of provincial security commissions, proposes that companies need to have a policy on how to improve gender equality and diversity in their executives and boards — or explain to their shareholders if they don’t. The “comply or explain” model would allow shareholders to choose whether or not to hold the board accountable and whether they view the demographics of the company’s board and senior management as an issue or not.
Bill C-25 enjoys broad support from institutional investors, governance experts to regulators, and represents an important step in making our corporate sector more democratic. It calls on distributing corporations to hold annual elections for individual directors, giving shareholders more say and reducing the entrenchment of boards.
This legislation is hardly an effort to control the private sector. It will modernize Canada’s legislative framework and support shareholders who want their companies to be more diverse and able to reflect our communities, which will ultimately drive better business outcomes. Navdeep Bains is the Minister of Innovation, Science and Economic Development and MP for Mississauga- Malton