Some of Canada’s largest institutional investors are calling for women to represent a minimum of 30% of boards and executive management teams of S&P/TSX composite index companies by 2022.
In a joint statement, 16 investors managing a combined $2.1 trillion in net assets, say quicker and more decisive action is needed to close the gender gap in Canada. They are challenging institutions and business leaders to use their collective voice as public company investors to help influence gender diversity in the country’s offices and boardrooms.
“Gender diversity is a critical component of good corporate governance,” said the statement. “It is well established that diverse boards and executive management teams are more likely to achieve better outcomes for investors by introducing a broader spectrum of perspectives, skills, and experience. We are committed to exercising our ownership rights to encourage increased representation of women on corporate boards and in executive management positions in Canada.”
The 16 companies are members of the Canadian 30% Club Investor Group, which campaigns for greater representation of women on the boards of FTSE100 companies.
“We know that greater diversity leads to better governance and business outcomes, and it is in the best interests of investors to press for change for the benefit of their clients, shareholders, and the economy,” says Victor Dodig, chairman of 30% Club Canada. “The investor statement is an important commitment addressing the significant role investors play in moving the dial on gender balance in the boardroom and in senior management, holding companies accountable for real change.”
According to a review by the Canadian Securities Administrators in 2016, only 12% of board seats were occupied by women, which increased to 18% for the 215 largest issuers that have a market capitalization of more than $1 billion.
The group said that some of the ways companies can help reach the 30% target include:
- Publicly disclosing diversity policies and processes used to identify female board nominees and female candidates for executive management positions.
- Adopting a professional and structured approach to director nominations that ensures directors are appointed based on merit, with due regard for the benefits of gender diversity.
- Using existing resources to ensure effective consideration of gender diversity, and recognizing and taking steps to mitigate cognitive bias wherever possible.
- Committing to rigorous assessment of director and executive performance, as well as regular board refreshment.