The legislation mantra

I'm From the Government and I'm here to.......

Really?
Here to help, are you?!

The current Canadian mantra is that companies can set targets for themselves, make good use of recruiting companies and then watch the market place for strong female candidates for their boards. 

One voluntary initiative, launched in 2012 is the Catalyst Accord. The Accord was a call to action for Canadian corporations to increase the overall  proportion of FP 500 board seats held by women to 25% by 2017.

They didn't make it.

Also in 2012, Canada's then Conservative government signalled its intent to advance as a matter of federal government policy , gender equity in the board room. The scheme was to link corporations to a network of women with professional skills and expertise. 

Kinda smacks of candidate Romney's infamous election gaff when he announced that he had binders of resumes of competent women to serve in his government. 

But, back to Canada.

The government of the day acted in true Canadian fashion and ....appointed a committee (advisory council) to suggest to businesses how to recruit more women to directorships. These, presumably are the same companies on the FP 500 who already knew how to proceed with recruitment consultants in place to help them. 

Now, we wouldn't be Canada if we let the Feds act alone. No, we have provincial governments who can also duplicate what the Feds do. In 2013, Ontario (also in its budget address) declared a goal to generate broader gender diversity inn board rooms across businesses in Ontario. It enlisted the help of the Ontario Securities Commission through which 50% of Canadian companies are registered. The intention was to set out comply or explain guidelines for companies to describe what they are doing to bridge the gender gap in Corporate governance. However, it would be to government to consider the best way for firms to disclose their approaches to gender diversity.

The OSC would then take steps to amend its disclosure rules by requiring publicly traded corporations to describe how they are promoting gender equity , in their annual reports. 

Institutional shareholders-who hold the majority of shares in corporations listed on the TSX, agreed with this approach (through the ICGN. The CCGG however added the caveat that this should be re visited in 3 years to see if the comply or explain approach actually worked. The CCGG also suggested that corporations also describe how their efforts are working. If they are not and are not meeting defined targets , they are expected to explain why. 

The Quebec government has had nothing to do with this meely mouthed approach. In 2004, Quebec imposed a 50:50 rule for public sector companies. By 2011, 52% of directors were women. 

In 2011, a Quebec Senator, Celine Herieux-Payette introduced Bill S 203, which was subsequently referred to the Senate Standing Committee on Banking, Trade and Commerce. The Bill recommended that an approach similar to PQ's be adopted for Canadian Crown Corporations. It was subsequently re-introduced with a 40% quota but has failed to get traction. 

The Canadians might want to consider the US approach, which is, actually getting some traction. In 2009, the SEC amended item 407(c)(2)(vi) of its regulations S-K to set out guidelines for Nominating Committees to follow with respect to recruitment practices and attention to diversity practices. It would not be a federal case for Canadians to do the same with respect to Canadian NP 58-201, 58-101 FI or 58-101F2. 

Of course, given that this would be specifically to advance gender equity, there would need to be a clear definition of what is meant by diversity. 

Does comply or explain work...or are mandated quotas better?