With the exception of the big banks, corporate Canada’s record on diversity remains woeful. Regulators and shareholders must do more on this front.

The latest data on diversity from the Canadian Securities Administrators (CSA) reveal that there has been some progress over the past couple of years to improve the representation of women on corporate boards and in executive suites. In general, the trend is moving in the right direction, with a few more women evident in the highest ranks of public companies, particularly at larger firms.

Yet, the overall picture remains rather dismal. According to the CSA’s latest data, just 14% of board seats at Canada’s public companies are held by women. Moreover, around 40% of issuers still don’t have a single woman on their board and 38% don’t have even one female in their top executives’ ranks.

So, although there has been progress on diversity since the regulators (led by the Ontario Securities Commission ) began introducing disclosure requirements in this area in 2014, it is coming at a snail’s pace.

Regulators can, and should, be doing more. They can ratchet up disclosure demands and provide companies with more guidance on diversity practices. But, ultimately, the power resides with shareholders. The underlying objective of enhanced disclosure on diversity is to empower shareholders by enabling them to make more informed voting decisions. Institutional investors, in particular, can lead the way in demanding best practices.

Regulators have laid the groundwork. Establishing minimum governance and disclosure standards saves institutional investors the costly, time-consuming chore of engaging with companies one by one on these issues.

Other players in the shareholder democracy process must play their part as well. For example, U.S. proxy advisory firm Institutional Shareholder Services Inc. has flagged gender diversity as a key issue and is proposing to revise its voting policies for the 2018 proxy season in order to push Canadian companies to improve their approach to diversity.

The ultimate objective is robust, efficient markets.

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