Minister makes case for gender diversity
The federal government hopes its corporate governance bill will improve gender diversity on corporate boards, but won’t rule out quotas if the problem persists, Innovation Minister Navdeep Bains said Wednesday.
The Minister of Innovation, Science and Economic Development made the remarks at an event hosted by Women in Capital Markets (WCM) at Toronto law firm Stikeman Elliott LLP. Bains made a business case for the issue, saying the country can’t afford to leave the brainpower of half the workforce out of top leadership roles.
When it comes to hard quotas, “that option is always on the table,” Bains said. “We will look at every conceivable option to get meaningful progress.”
Women occupy about 12 per cent of corporate board seats in Canada, significantly less than other developed nations including the U.S. and the U.K. In 2014, securities administrators in seven provinces and two territories started requiring that companies report annually on their efforts to recruit more women to boards and se- nior management.
Progress has fallen well short of their 30 per cent target, however. The percentage of women on corporate boards grew by just one percentage point in 2016, up from 11 per cent the year before.
Bains said a bill he is sponsoring in the House of Commons should help move progress along. Bill C-25 proposes several changes to corporate governance, including a requirement that shareholders elect directors every year and cast their votes for individuals, not slates.
These measures should encourage turnover, giving women more opportunities to get a seat at the table, Bains said.
He also said the measures will improve shareholder democracy and improve competitiveness.
Bains cited studies showing companies do better with women in leadership positions. Studies show companies with diverse boards have 53 per cent higher returns and are 70 per cent more likely to break into new markets, he said.
“There is a strong business case. It really is good for the bottom line,” Bains said. “Diversity is powerful. Not just in investing, but in a variety of other areas of business.”
Jennifer Reynolds, chief executive of WCM, said she was hopeful that Canada’s sluggish progress on the issue will improve with the federal government’s help.