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This article appears in the November 2020 issue of Investment ExecutiveSubscribe to the print edition, read the digital edition or read the articles online.

Publicly traded companies are appointing more women to their boards, but most of those board roles appear to be going to white women.

Public companies incorporated under the Canada Business Corporations Act (CBCA) are required to disclose diversity statistics. According to an October report from Toronto-based Osler Hoskin & Harcourt LLP, women accounted for 28.3% of the board seats of disclosing CBCA companies listed in the S&P/TSX composite index as of July 31.

That’s a significant improvement over five years ago, when women made up 19.4% of the boards of companies in the index, according to a joint report by New York-based Catalyst Inc. and the 30% Club.

Large companies do an especially good job of appointing women to board roles; women held 31.4% of the board seats at companies on the S&P/TSX 60 index as of July 31, according to the Osler report. But only 5.5% of directors at CBCA companies were members of visible minorities.

According to a July report from Toronto-based Norton Rose Fulbright Canada LLP pertaining to a study of 199 Canadian public companies, 64.8% have no representation by visible minorities in senior executive roles and 75.4% have no members of visible minorities on their boards.

“My fear with the whole movement of diversity is that it has been focused [only] on gender,” says Shilpa Tiwari, founder of Her Climb, an initiative that advocates for Black, Indigenous and women of colour (BIWOC) leaders. Diversity initiatives, Tiwari says, have left BIWOC women behind.

Tiwari says the most common — and most frustrating — comment she receives about the lack of ethnic and racial diversity in public companies is that there are not enough qualified BIWOC women to assume leadership positions. “We have to move away from saying things like that because it’s actually quite inappropriate, it’s untrue, it’s discriminatory and [it’s] bordering [on] racism,” she says.

According to Statistics Canada, women of colour born in Canada are more likely to have a post-secondary degree (47.7%) than women who do not identify as a person of colour (25.8%). However, only 68% of working-age women of colour — both those born in Canada and abroad — are employed, compared with 79% of white women.

Furthermore, while women of colour may struggle to reach the top ranks of companies, they are no less ambitious than white women. On the contrary: 48% of women of colour say they aspire to be a top executive, compared with 37% of white women, according to StatsCan.

“The problem is [women of colour] are not being seen,” Tiwari says. “In most cases, women of colour have to work harder, they [advance] slower or don’t move at all, and they are paid a lot less than non-racialized women. After a while, it just becomes frustrating.”

Tiwari says employers should collect data about the race, ethnicity, gender and religion of all their employees — from entry-level positions to the C-suite. Corporations can then refer to that data when looking at promotions, terminations and turnover rates to see if recurring themes emerge.

Michela Gregory, director of ESG services with Northwest & Ethical Investments LP in Toronto, says tackling this problem is not just about data collection; rather, it’s about implementing targets. “If a corporation is setting targets, then there is purposeful work that goes behind delivering upon those targets,” she says.

Setting specific targets for gender diversity on corporate boards in Canada has achieved results, Gregory says, adding that a similar approach would help BIWOC women advance.

Incidentally, shareholders are demanding more information from companies on the racial composition of their boards. A September report from global proxy advisory firm Institutional Shareholder Services Inc. states that 73% of investors believe companies should disclose the demographics of their board members, including board members’ self-identified ethnicity.

According to the Osler report, 64.7% of CBCA companies now have written diversity policies, up from 58.1% in 2019. The overwhelming majority (97%) of diversity policies include a specific focus on women, but only 57.5% include a focus on ethnicity and/or race.

“Investors want insights into how corporations are approaching their diversity initiatives and strategies,” Gregory says, adding that boards also need to look at the limitations of their recruitment strategies, which may be hindering their ability to attract diverse talent. Eighty-seven per cent of boards surveyed in 2016 by PricewaterhouseCoopers LLP stated they rely mostly on fellow board members to recommend new candidates for board roles.

“Boards need to consider whether they need expertise from outside persons or consultants to help work through some of the limitations that currently exist — [limitations boards] might not even be aware of,” Gregory says.

Tiwari, who worked for a large Canadian insurer for several years before establishing Her Climb in early 2020, says she has witnessed the effects of systemic racism and corporate biases.

“Besides doing your work, you also need to fight to be paid equally for that work, and you need to fight to be able to talk about that work,” Tiwari says. “There are so many women I know who will say the same thing. Women get tired of this.”

Through Her Climb, Tiwari speaks with highly credentialed women about their experiences. She encourages corporations to listen to women who have been impacted directly by racism and unconscious biases to better understand “what needs to be done to change the system.”

Tiwari says she is concerned that qualified BIWOC women who are frustrated by their slow progress up the corporate ladder will simply leave their companies.

“A lot of high-calibre women are leaving corporations because of the bias [they] experience and microaggressions,” Tiwari says. “But if they leave, people are going to continue to say there are no qualified women of colour ­and there is never going to be a change in how corporations work.”