The Ontario government has decided to prod companies and organizations into increasing the presence of women on boards and in senior management positions through a "comply or explain" approach. Rather than set hard quotas, the government has opted to let companies improve their performance – but if they fail, they will be obligated to explain why.
This is a very welcome boost toward a desirable end. As pointed out by Laurel Broten, Ontario's minister responsible for women's issues, the province has been moving at a "glacial" pace. The proportion of women serving as company directors has been stuck at about 10 per cent for the past decade. Compare that to 36 per cent in Norway, 27 per cent in Finland and 18 per cent in France.
As the government knows, diversity is about much more than gender. Visible minorities make up 26 per cent of Ontarians, and half of people living in the Toronto region. People living with disabilities make up 16 per cent of the provincial population, aboriginals 2 per cent and immigrants 29 per cent in the province.
This rich diversity is a great asset for Ontario, and a recent poll by Nanos Research shows that most people not only agree with this, but can identify why this is the case. They link diversity in society to economic and social prosperity, and so welcome it.
The case for diversity has been well made. In the natural world, it's the great insurance policy against catastrophic disease. Investors put money in a variety of companies and classes of asset to protect against the company failures and bubbles. Diversity protects us against the threats imposed by monoculture.
Even better are the benefits to diversity's upside: links to markets and customers, talent pipelines, innovative ideas, different perspectives. Companies that have embraced diversity in leadership have connected better to their customers, employees and suppliers, who are themselves diverse. And they've connected better to overseas markets and pools of talent by contact with diaspora networks. They've brought new talent to the table and created a human resource advantage.
The DiverseCity Counts project has been compiling data on diversity in leadership in the Toronto region over the past five years. There's been progress, but it's been slow. People who make appointments tend to work within their own comfort zones, and through their own networks of acquaintance. They might aspire to diversity but don't know how to go about it. And there are few available tools and instruments to help.
One of the project's initiatives, DiverseCity on Board, provides one such tool, a matching service for organizations seeking to diversify their board. With 1,500 prequalified candidates on its roster, the service has assisted in 640 board appointments to more than 600 organizations, and has been recognized with a United Nations award for innovation. It is being replicated nationally in Montreal, Ottawa, Thunder Bay and Hamilton, among others, and internationally, including Berlin, London and Boston.
We need more tools, though. Change takes time. We're on the right track, but sometimes change needs a boost.
The Ontario government is right to nudge boards toward more gender diversity. But we need to use a fuller definition that includes other underrepresented groups as well. Instead of merely catching up, Ontario should move to the forefront of diversity.
Alan Broadbent is chairman and CEO of Avana Capital Corp. and chairman of the Maytree Foundation. Ratna Omidvar is president of the Maytree Foundation.