TSX-listed companies would report targets for women on boards under Ontario proposal
A proposal by the Ontario Securities Commission aims to get more women on corporate boards and in senior management—without establishing quotas.
The amendments to the OSC's policy on the disclosure of corporate governance practices, released on Thursday (January 16) for a 90-day comment period, would apply to all companies listed on the TSX, Canada's largest stock exchange.
In a news release, the OSC said the proposal would require TSX-listed companies to disclose annually their targets for the representation of women on their boards and in executive officer posts, the number of women in these positions, and their policies on the representation of women on their boards.
TSX-listed companies would also be expected to report their "consideration" of the representation of women with regards to director selection and executive officer appointments.
Finally, the proposal would see TSX-listed companies report their term limits for directors.
“Our proposed amendments are intended to encourage more effective boards and better corporate decision making, which will benefit investors and the capital markets,” Howard Wetston, chair and CEO of the OSC, said in the release. "This is about helping TSX-listed issuers tap into a pool of talented and capable resources currently under-represented on today's boards and senior management.”
However, in an October 2013 letter to the OSC, the Ontario Teachers’ Pension Plan argued that a quota-free "comply or explain" model would not be an effective way to increase the number of women on male-dominated boards.
Teachers, which has $129.5 billion in assets, proposed requiring all TSX-listed companies to appoint at least three women to their boards.
"Even though there has been a great deal of advocacy and discussion surrounding a push for greater board gender diversity within Canada for many years, there has been minimal improvement in the number of women on Canadian boards. Over the past decade, the number of boards that have no female directors has consistently varied between 40% and 50%, and the percentage of women on boards in Canada has remained in the 10% to 13% range. Given the lack of progress in appointing women to boards we believe there is a need for an approach to have an immediate and profound impact," Teachers senior vice-president Wayne Kozun wrote.
In its request-for-comment document, the OSC notes that it has followed through on a May 2013 budget promise by the Ontario government to "consider the best way for issuers to disclose their approaches to gender diversity".
The OSC held a public consultation process last year concerning the potential adoption of a "comply or explain" regime.
"We received very limited advocacy from stakeholders for introducing quotas for women on boards and/or in senior management. The Proposed Amendments do not include any requirements for issuers to adopt such quotas," the OSC document states.