OSC urged to push companies to set targets for women on boards

Canada's biggest securities regulator says it may be time to strengthen its measures to get more women on boards — with some corporate leaders calling for companies to be forced to set specific targets — after glacial progress in the past three years.

At a panel in Toronto on Tuesday, Ontario Securities chair Maureen Jensen said progress has been slow, with women holding just 14 per cent of board seats compared to 11 per cent in 2015.

Jensen noted it has been three years since the OSC introduced a comply-or-explain rule, which requires most companies listed on the Toronto Stock Exchange to disclose annually how many women are on their board and in executive officer positions.

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She said it may be time to supplement this rule with guidelines, or revise existing provisions and possibly take other regulatory action such as disclosure enhancements.

"After three years of focusing on this, it's not much of a needle that we've moved," Jensen said.

This comes after the Canadian Securities Administration released a report earlier this month which showed that 61 per cent of 660 TSX-listed companies have at least one woman on their boards, up from 49 per cent when the report was first published in 2015. Overall, just 14 per cent of all board seats are held by women. When boards do have a vacancy, just 26 per cent of those seats are filled by women, the report showed.

At this rate, Jensen said, it would take three decades to reach parity between men and women on corporate boards.

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The OSC does not have the authority to impose a specific target or quota — that would be up to government authorities — but the regulator can compel companies to adhere to certain disclosure requirements.

Judy Cotte, RBC Global Asset Management's vice-president and head of corporate governance and responsible investment, was one of several panellists to recommend that the OSC build into its corporate governance guidelines that firms must set a specific gender diversity goal.

"Companies should set a target and disclose progress against that target," Cotte said. "It still allows them to set a target that is appropriate for them, both at the management and board level, but I think that would be a very powerful signal to set that as the standard."

She acknowledged that some firms in industries may have difficulty recruiting women, and allowing them to set their own targets will give them some flexibility. However, Cotte noted that research which indicates at least 30 per cent female representation is needed to ensure women's voices are heard.

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TMX Group Ltd.'s president of capital formation Ungad Chadda also said pushing companies to set targets was "the next logical step."

Eileen Mercier, the chair of the Canadian Payments Association and former chair of the Ontario Teachers' Pension Plan Board, called the progress "glacial."

"People who have power give it up exceedingly reluctantly... That's where targets and quotas actually become necessary," she said.

Jensen said the OSC will continue to solicit input, and plans to meet with the CSA to discuss options and later publish their findings for public consultation. Options on the table include adding targets and adding in measures to corporate governance guidelines to call out specific behaviours, she added.

"We are considering changes to our policy... It's a very important topic that were not giving up on," Jensen said.