New rules could see public companies required to set targets for the number of women in senior roles as the Ontario provincial government tries to improve years of stalled growth in gender diversity.
Ontario minister of women’s issues Laurel Broten told The Globe and Mail that the provincial government and the Ontario Securities Commission were working together to find ways to compel companies to set goals for the number of women sitting as corporate directors, as well as in senior management.
"We're saying, 'Have the conversation. Focus on it, and set your own targets,'" Broten said. "But we must do something different than is being done right now. The world is describing our progress right now as 'glacial' in relation to other countries, and we are slipping."
Female directors make up just 13.1% of Canadian boards – an increase of less than 1% since 2009, according to findings by research firm GMI Ratings. Comparatively, women make up more than a quarter of boards in Norway, Sweden and Finland and even the USA has made progress with the proportion of female directors reaching 16.9%.
The province is currently considering a "comply or explain" approach, which would require companies to publicly disclose a diversity policy and provide an annual assessment of progress, or explain why they have set no goals.
"It won't be a one-size-fits-all approach, but it will be that you need to have this conversation about your approach to gender diversity," she said.
While Ontario is the only province considering the quota, it would affect any company that has shares traded in Ontario, essentially covering all of Canada’s largest public companies.
A report release last year by the Credit Suisse Research Institute found businesses with women on their boards outperformed those with all-male boards by 26%.
“If gender diversity on the board implies a greater probability of corporate success, then it would make sense to pursue such an objective, regardless of government directives,” the report said.
About 40% of Canadian boards have no women at all.
Gender diversity advocacy group Catalyst Canada put together a call to action last year, asking companies to commit to increasing the percentage of women on their boards to 25% by 2017. To facilitate the process, the organization put together a list of “board ready” women, silencing those who claim the gender disparity is due to a lack of qualified business women.
Alex Johnston, executive director of Catalyst Canada, said the Ontario government's plan should help Canada to regain ground it is losing to other countries that have taken action on the issue.