Quotas required to have more women on corporate boards?

Of the 12 largest European markets, five – France, Germany, Belgium, Italy and Norway — have mandatory quotas on women serving on boards.

So, 46 per cent of 733 TSX-listed companies have no women sitting on their boards.

Not even one.

This news, announced earlier this month, in a survey by Osler, Hoskin & Harcourt LLP, means there were 337 annual general meetings held in the past 12 months where a group of men (overwhelmingly white, middle-aged men) sat around a table and:

  • Didn’t find it odd that there were no women at the table? Not one?
  • Debated the merits of having women on the board, but decided not to?
  • Admitted that women should be on boards, but felt that no woman was qualified just yet to be on their board?
  • Endured public abuse from shareholders during the AGM — following private pressure by institutional investors, such as CPPIB, OMERS and Teachers — for having an all-male board? This, despite disclosing their approach to gender diversity and having written diversity policies, as mandated by the Ontario Securities’ Commission’s “comply or explain” rules introduced last year?
  • Pleaded for more time? I can hear it now: “The rules came in just last year and board vacancies won’t open up for awhile yet. But you can be assured that when they do, we’ll definitely consider a woman.”

Are. You. Kidding. Me?

The fact is, 18 months into the new “aspirational” regime, the number of companies with no women has fallen from 47 per cent to … 46 per cent. At this pace, it will be 2062 before every TSX-listed company has one woman board member. Not a minority. Not a majority. Not all. One.

And don’t think this pace will change.

Last year’s report, done by Torys LLP, drew this comment from Rima Ramchandani, one of its co-authors: “I would have thought we would have seen more, but I do think it’s early days, and I suspect in the next year … there will be an increase in that number.”

This year, the bewilderment belonged to co-author Andrew MacDougall, who said: “I was expecting better … we do need people to step up and take more action. I do think if nothing further is done by industry, then the government is going to take further steps.”

So maybe it’s time to impose quotas on board composition, forcing all public companies to have a certain number of women as directors.

But aren’t quotas unfair? Yes, they are, but not as unfair or negative as blatant sexism.

Aren’t quotas unCanadian? No, they aren’t. Quotas exist everywhere, from Canadian songs on the radio, to Canadian players in the CFL, to Canadian jobs building our new American fighter planes.

Aren’t quotas self-defeating and counterproductive? No, and no. A European Union study on gender diversity published in April pointed out that of the 12 largest European markets, five – France, Germany, Belgium, Italy and Norway — have mandatory quotas on women serving on boards.

It went on to say: “Countries where the government passed legislation introducing mandatory quotas on board gender diversity at listed companies during the years 2011-2015 tended to experience high levels of growth in the percentage of women on boards over this period.”

In other words, more women on boards breed … more women on boards.

Take Norway, where 384 of the country’s 563 publicly traded companies took themselves private in order to not comply with the country’s compulsory quotas in 2006. Last year, it saw the percentage of women on boards rise from 35.5 per cent in 2014 to 38.7 per cent.

I also get no sense that all these women leading European companies is hobbling the ECC’s growth.

I’m not the only one screaming at Queen’s Park to be bold when being nice clearly isn’t working. But I’m not a woman, either, and I don’t serve on a public board.

Someone who is and does is Patrice Merrin, a highly experienced corporate director, who is the first woman to serve as a director of the global resource giant, Glencore. Back in 2013, she responded to the OSC’s Call for Comment by recommending that it “Introduce a target that women must comprise a minimum of 33 per cent of a board’s directors by June 30, 2018, and state, at the outset, that if the targets are not met, quotas will be imposed.”

Well, here we are in the fall of 2016 – half way between 2013 and 2018.

The Catalyst Report on Gender Diversity on Boards in Canada, published in July, thinks the “comply or explain” regime just needs more time to work its magic. In their words, “it is far too soon to fully assess the impact of the rule amendments.”

I disagree.

True, the proportion of women on boards has grown to one-in-five. There are some real stars, though they’re Crown agencies of the Ontario Government: Metrolinx has five women out of 14 board members and the Liquor Control Board of Ontario has five women out of eight directors, including its chair.

But for every one of these rare examples there are hundreds and hundreds of public companies that don’t have a single woman on their board, let alone one in five. Some of them are small-cap, to be sure, like H&R Real Estate Investment and First Quantum Minerals. But others, like Canfor Corporation, have annual revenues in the billions.

What will it take to tolerate the presence of a woman – just one – at their board table during next year’s AGM?

Not speaking softly.

So how about a big stick?

 See the article here.

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