Increasing Gender Diversity in Corporate Leadership
Ontario Securities Law Changes Promote Greater Representation of Women on Boards and in Senior Management
Ontario has taken action to increase the number of women in high-ranking positions in the workforce by approving securities law rule amendments that will encourage greater representation of women on corporate boards and in senior management teams.
In order to promote the inclusion of more women in senior roles, companies will now be required to disclose:
- The number of women on the board and in executive officer positions
- Policies regarding the representation of women on the board
- The board's or nominating committee's consideration of the representation of women in the director identification and selection process
- Director term limits and other mechanisms of renewal of their board
Enforced by the Ontario Securities Commission, the new amendments will promote a proactive approach through a "comply or explain" model rather than prescribed diversity quotas. The rule changes will come into force on Dec. 31, 2014, in time for the required information to be included in 2015 annual reports.
Supporting more executive women in the workforce is part of the government's economic plan for Ontario. The four-part plan is building Ontario up by investing in people's talents and skills, building new public infrastructure like roads and transit, creating a dynamic, supportive environment where business thrives, and building a secure savings plan so everyone can afford to retire.
- The amendments are based on input from a public roundtable and Ontario Securities Commission led consultations with subject matter experts and publicly traded companies listed on the TSX.
- Of 448 firms that responded to the survey from the Ontario Securities Commission, 57 per cent have no women directors and 53 per cent have women in less than 10 per cent of their executive officer positions.
- Almost 90 per cent of the survey respondents do not publicly disclose the proportion of women employees in the whole organization.
- Women make up 48 per cent of the workforce yet account for only about 16 per cent of board members of Canada’s FP500 companies.
- Studies by Catalyst Canada, Credit Suisse and McKinsey & Company have found that gender diversity in corporate leadership is linked to improved performance on both financial and non-financial measures. Benefits include strong ﬁnancial performance, heightened innovation and enhanced client insight.
“Enhancing gender representation on companies’ boards and in senior management teams will not only make corporations more productive, it will also help attract new investment and grow our economy. Greater gender diversity on corporate boards will contribute to a stronger Ontario economy.”
“Increasing the number of women in corporate leadership is good for the economy and good for business. Helping women reach their full potential by supporting women in leadership is part of this government’s commitment to creating a strong and fair Ontario and is a critical step towards achieving gender equality across all sectors.”
“We are delighted that these regulations are now law, and we commend the provincial government for helping put the issue on the front burner. These requirements will push more companies to have the conversations they should be having around board and executive committee diversity and, hopefully, their talent development. Businesses need to tap the full pool of smart, talented people to stay competitive and strengthen our country’s economic future.”