Skip to main content

More than two years ago The Globe and Mail published an article with the news that – finally – the S&P/TSX Composite, the stock index with more than 200 of Canada’s largest companies, didn’t have a single member with an all-male board of directors.

Well, sometimes we take steps backward.

I regret to inform you that the index now contains two companies where nary a woman sits on the board of directors: legal software seller Dye & Durham Ltd. DND-T and specialty insurer Trisura Group Ltd. TSU-T It would have a third had cannabis company Village Farms International Inc. VFF-T not fled the Toronto Stock Exchange at the end of 2021, saying it didn’t want to pay the listing fees any more because it got enough liquidity from U.S. investors.

It was Osler, Hoskin & Harcourt LLP who flagged the return of all-male boards in its annual review of diversity in corporate Canada. There are a variety of studies on this issue, and Osler and others generally find that there are still quite a few all-male boards in Canada, but they’re at the smallest companies. Now, typically, when a company gets big enough to be included in Canada’s major stock index, it’s already taken the step of bringing women onto its board.

Not so with these three companies, to which I’ve pointed out their dubious distinction. All three tell me they’re going to do better. But companies that still have to find a woman to diversify their all-male boards are badly behind the times – and things will get worse for them this year as the major proxy-advisory services ratchet up their requirements for gender diversity.

As hard as it is for certain dudes to admit, diverse boards are better boards: The groupthink that can occur in a room full of old white men is actually a risk to governance.

That’s why institutional investors, and the proxy advisers who work with them, have been turning up the heat on matters of gender diversity on boards. A number of Canadian pension plans, including biggie Canada Pension Plan Investment Board, will vote against the director who chairs the board’s nomination committee if diversity is lacking.

When companies stop pretending ‘meritocracy’ explains all-male boards, women advance

Canadian companies add more women to boards, but other progress has stalled, report says

Starting this year, advisers Institutional Shareholder Services and Glass Lewis & Co. are toughening up their voting policies for Canadian boards. ISS will recommend a “no” vote for the nominating committee chair at a S&P/TSX Composite company if either it does not have at least 30-per-cent female directors or does not have a 30-per-cent target for women on their boards within a reasonable time frame. Glass Lewis says it will typically recommend a “no” vote against the nominating committee chair when the board has at least seven directors, but does not have at least two female directors.

Directors of companies listed on the TSX, including those chairing nomination committees, must submit their resignations if they fail to receive 50 per cent of the votes cast, although the companies have some latitude in declining to accept the resignation.

Dye & Durham, Trisura and Village Farms all got added to the Composite in 2021 by S&P Dow Jones Indices, which manages many indexes across the world that are used to invest in the broad stock market. The rules for inclusion in the Composite include the value of the company and how widely owned it is by shareholders – but not governance matters such as board gender diversity. (For that, S&P Dow Jones Indices maintains an ESG version of the Composite, which none of these three companies is in.)

The three companies, in response to my queries, displayed various levels of commitment to diversifying their boards.

Trisura chief executive officer David Clare said in an early-February e-mail that his company is “working actively to improve our board composition.” The company, a spinoff of Brookfield Asset Management that was listed on the Toronto Stock Exchange in June, 2017, has a six-man board. On Sunday, Mr. Clare e-mailed to say that the company’s board nominated a new female director at its meeting on Feb. 10. Late Tuesday, Trisura said it was appointing Janice Madon, former chief financial officer of Manulife Canada, to its board.

Brian Derksen, chair at Dye & Durham, said the company’s goal is to add at least two women to the company’s board in 2022. (The company, which went public in July, 2020, had its shareholders meeting on Dec. 21, where it presented seven men for election, including former Saskatchewan premier Brad Wall.)

“As a young public company, new to the S&P/TSX Composite, our board earlier this month decided to design and implement a board gender diversity strategy,” Mr. Derksen wrote in an e-mailed reply. “Recognizing the importance of gender diversity and its clear and undeniable value with respect to governance, decision making and business performance, our governance and nominating committee has begun a process of identifying and recruiting qualified candidates.”

Lawrence Chamberlain, head of investor relations for Village Farms, noted the company had a woman on the board until June of 2020 when Dr. Roberta Cook retired after four and a half years. The company did not fill her spot and presented to shareholders that same month, and again in June, 2021, its nominees for a six-man board.

“Village Farms is an equal opportunity employer and that extends across the entire organization,” Mr. Chamberlain said. He said gender diversity “will be one of several factors used in the search process” and, “where appropriate,” it will recruit “qualified female candidates.” He also said Village Farms is “continuously monitoring the level of female representation on the board,” which I think cannot be too challenging a task, since there are no women to monitor.

When The Globe reported the end of all-male boards in the Composite in 2019, the milestone was met with the reaction that it had taken far too long to get to that point. We quoted Amy Freedman, then CEO of shareholder consultant Kingsdale Advisors, with her sarcastic “Congratulations, but really?”

Now, unfortunately, I revoke that congratulatory message on her behalf.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.