In an effort to improve gender diversity in corporate Canada, the Ontario Securities Commission (OSC) is going ahead with plans to require public companies to enhance disclosure in this area.

The OSC today proposed local amendments to Form 58-101F1 of National Instrument 58-101 Disclosure of Corporate Governance Practices, which would require TSX-listed issuers to disclose various aspects of their diversity policies, including: their approach to the representation of women on the board; the number of women on the board and in executive positions; any targets for women in those roles; and, their approach to considering women when selecting directors, or hiring executives. They would also be required to disclose term limits for directors.

The proposed amendments, which are out for a 90-day comment period, would apply to non-venture issuers that are reporting issuers in Ontario. The proposals follow the issuance of a consultation paper last summer at the behest of Ontario’s finance minister, Charles Sousa, who called on the commission to tackle the issue. (See Investment Executive, OSC eyes gender diversity of boards, July 30, 2013.)

Many of the comments submitted on the paper that supported the goal of encouraging greater diversity argued that disclosure will be ineffective, and that if the OSC really hopes to change things, it should impose quotas, as various other countries have done. It was also suggested that the focus on women should be expanded to various other minorities that are under-represented in corporate boardrooms.

In addition to the consultation paper, the OSC also held a roundtable in the fall to gather more feedback on the proposals. And, in November last year, it surveyed TSX-listed issuers about some of these issues.

Next: Level of women on boards is low
Level of women on boards is low

According to today’s notice, that survey found that “the level of representation of women on boards and in executive officer positions is low”. It reports that 57% of respondents have no women directors, 28% have one female director and just 3% have three women directors. Also, only three issuers who responded to the survey have women representing 50% or more of their board; only 3% have a female chair or lead director.

It also found that more than half of the respondents said that women hold less than 10% of their executive officer positions; and, transparency regarding the representation of women was also judged as “low”, with 88% of respondents not publicly disclosing the proportion of female employees in the organization, 80% not revealing the proportion in executive officer positions, and 61% not disclosing the number of women on the board.

Most respondents also do not have a policy regarding director term limits, it notes; and, it found that the level of director turnover within the last year “appeared to be low”. Most firms (91%) do not have a policy regarding the identification and nomination of women directors, and most (94%) don’t have targets regarding the representation of women on boards or in executive positions; it says.

“Our proposed amendments are intended to encourage more effective boards and better corporate decision making, which will benefit investors and the capital markets,” said Howard Wetston, chair and CEO of the OSC. “This is about helping TSX-listed issuers tap into a pool of talented and capable resources currently under-represented on today’s boards and senior management.”