It took Canada’s first female and openly gay Premier, Kathleen Wynne, less than three months to express strong support for gender diversity on corporate boards (see page 291 of the Ontario budget or this radio interview with the Minister Responsible for Women’s Issues, Laurel Broten).
The number of women on corporate boards could be improved. See “Canada falling behind on women on corporate boards,” where “women represent just 11% of board members on companies listed on the S&P/TSX composite index.” See also my earlier blog “25 big-name Canadian companies with no women directors.”
While numerous countries have pressed forward with diversity legislation since the financial crisis. But Canada, with the exception of Quebec, is a noticeable exception. The federal government only recently formed an advisory council to promote the participation of women on corporate boards.
Why did Wynne address boardroom diversity?
“We are a people rooted in diversity,” she said. “That’s how we came here. That’s who we are.”
“We are all capable of so much… I’ve offered myself to you as leader because of that optimism. Because of that love, that potential, and that possibility. That is what drives me.” [emphasis added].
See at 11:21 here:
“Can a gay woman win?” Wynne went on to say that the Province has changed and that “I do not believe the people of Ontario judge their leaders on the basis of race, sexual orientation, colour or religion. I don’t believe they hold that prejudice in their hearts.” [applause].
“They judge us on our merits, on our abilities, on our expertise, on our ideas. Because that is the way everyone deserved to be judged.”
Where she says “the people of Ontario,” you could just as easily insert “directors” and “shareholders.”
For Ontario, where our largest stock exchange is located, this is a welcome breath of fresh air. I have taught and advised hundreds of women who are enormously frustrated at the blockage on boards by over-tenured, over-boarded, entrenched pedigree directors. It is high time this changed and “comply or explain” using the Australian model is the best Canadian way to address diversity in my view.
“Diversity at ASX refers to all the characteristics that make individuals different from each other. It includes characteristics or factors such as religion, race, ethnicity, language, gender, sexual orientation, disability, age or any other area of potential difference. Diversity at ASX is about the commitment to equality and the treating of all individuals with respect.”
Ontario should define diversity explicitly and then have companies disclose their objectives and progress against that definition, both for boards and for senior management. It is important that diversity be interpreted as more than gender and Wynne’s background may have had a part to play in favoring the Australian model.
After observing dozens of board meetings over the last fifteen years and interviewing hundreds of directors, the dialogue and behavior changes with women in boardrooms. More and different questions get asked, groupthink is avoided, and people come prepared. I have seen dozens of men unprepared for a board meeting, but I have yet to see a single woman.
Directors should be selected on the basis of merit, not personal relationships.
What is needed is political leadership. We have this in the Ontario Premier.
Richard Leblanc is a governance lawyer, academic, speaker and independent advisor to leading Canadian and international boards of directors. He can be reached at firstname.lastname@example.org.