Bill C-25 has been contemplated by the legislature since 2014. Among other provisions, it includes a “comply or explain” provision to improve diversity on corporate boards. On December 6, 2017, Sarah Kaplan was invited to be a witness to the Standing Senate Committee on Banking, Trade and Commerce.
The video of the full testimony and Q&A period is available here. (You can start at 16:25:40 for the beginning of her testimony).
A copy of her opening remarks is here and below.
The Globe and Mail op-ed “Why Ottawa needs to nudge Canada’s boards toward greater diversity,” by Senators Omidvar and Massicotte proposing two key amendments for which we advocated – requiring targets and defining diversity – is here.
Testimony before Senate Standing Committee on Banking, Trade and Commerce
Good afternoon. Je voudrais remercier le Comité de m’avoir invité aujourd’hui.
It is an honor to appear before this Committee to comment on Bill C-25, in particular as it relates to diversity in the boardroom and the executive suite.
I am a Professor and Director of the Institute for Gender and the Economy at the Rotman School of Management at the University of Toronto. In this role, I promote the use of rigorous academic research to inform policy and practice, which is particularly important in the realm of gender and diversity where many common beliefs are not actually supported by data and may end up getting in the way of progress.
The goal of the diversity provisions of Bill C-25 is to increase representation of women and other underrepresented groups in business leadership. From a legislative and regulatory standpoint, there are two ways to achieve this goal. The first is quotas and the second is regulated disclosure. Bill C-25, and its precursor at the OSC, follows the latter path.
The working hypothesis underlying this “comply or explain” approach is that disclosure of diversity statistics will be enough to motivate firms to become more inclusively representative.
Unlike when Bill C-25 was first proposed, we now – in late 2017 – have the benefit of 3 years of evidence about whether this hypothesis has been proven.
Where do we see the 40% figure in Canada? Almost 40% of companies still have no women on their board.
When we look at practices to promote diversity, only 35% of companies reported having a written diversity policy, and only 11% of firms had diversity targets.
Disappointingly, of the 505 board seats that were filled last year, 74% were filled by men. At this rate, parity will be far beyond our reach for decades. If, as suggested in your hearing last week, replacement is the barometer of progress, then we are not making much headway.
These figures raise a question about whether the current bill will achieve its objectives. A wealth of social science research has observed the