Senators urge Liberals to give proposed board-diversity legislation more bite
|Toronto Star 31 Jan 2018 at 13:44|
OTTAWA—The Liberals should toughen up proposed legislation aimed at boosting diversity on corporate boards at publicly traded companies if they want it to be effective, says a group of senators pushing for the change.
“We want it to mean something,” said Sen. Ratna Omidvar, who was named to the upper chamber in 2016 by Prime Minister Justin Trudeau and represents Ontario as an independent.
Senators are expected this week to debate Bill C-25, which would, among other things, amend the Canadian Business Corporations Act to require publicly traded companies to disclose the number of women — and others from — on their corporate boards and in senior management, as well as their policies on diversity.
Failure to do so would require companies to explain themselves to their shareholders.
The Canadian Business Corporations Act affects nearly 270,000 companies, but the proposed changes would affect only those that also issue shares and report to a securities commission, which would include about 600 companies on the Toronto Stock Exchange.
The legislation would not specifically require targets for increasing diversity, although companies would be required to disclose whether they have them already.
That is something Omidvar is hoping to change.
She and five other senators are behind an amendment that would require the companies affected to set goals for the percentage for each designated group — women, visible minorities, Indigenous Peoples, and persons with disabilities — on boards of directors and senior management.
Companies would also need to set a deadline to achieve those non-binding targets.
There would also be an annual report, delivered to Parliament, on how well they are doing in the aggregate.
Omidvar said the targets would be voluntary, not quotas, and that businesses would be able to take industry-specific factors into account.
“It’s normal business practice to set targets on a whole bunch of indicators and benchmarks that businesses set themselves,” she said.
The fact that the legislation currently lacks targets likely stems from a reluctance to impose too many regulations, said Omidvar, who added she does not think her idea goes too far.
“We actually think this is a bit more of a deliberate nudge, but it is still a nudge. We are going to nudge corporate boards along,” she said.
“Without targets, we may see no improvement.”
Economic Development Minister Navdeep Bains said the decision to use a comply-and-explain model reflects what has worked well elsewhere, including in Australia and Britain, and that the government’s approach has broad support from those affected.
“This bill really reflects a lot of consensus, a lot of support from many in the business community, the not-for-profit organizations and people who want to see improvements to better outcomes in terms of diversity and gender representation at boards and senior management,” Bains said in an interview.
“We feel those address those issues.”
Prime Minister Justin Trudeau has made gender equality a top theme for his Liberal government and it is expected to be a major priority in the 2018 federal budget, building upon its initial efforts to provide a gender-based analysis of its proposals last year.
Finance Minister Bill Morneau said last month that the forthcoming budget will detail government efforts to boost the participation of women in the workforce.
Omidvar said the Liberals — and all feminists — should remember that women are not the only ones being left behind.
“Gender equity is really important. After all, half our population is women, but unless we dig deeper into the intersectionality of race, ethnicity, ability, Indigenous status, we are not going to get at the core of exclusion,” she said. “How can we know we’re making progress if all they’re measuring is gender? We have to measure these other benchmarks as well.”
Omidvar said she was glad to see the Liberal government agree to earlier changes that would involve including a clear definition of diversity — using the Employment Equity Act as a guide — in the regulations that will follow the legislation.
That said, Bill C-25 could still be stronger, she said.
“I do want to give the government credit for when they listen,” Omidvar said. “I just want them to listen a little harder.”