Mark Sevestre is a senior adviser and founding member of the National Aboriginal Trust Officers Association.
Shannon Rohan is the chief strategy officer at the Shareholder Association for Research and Education.
Over the past year, corporate governance discussions around diversity and inclusion have taken a necessary and long overdue look at representation of Black, Indigenous and people of colour as well as other underrepresented groups in corporate leadership.
The BlackNorth Initiative, an important voice in this space, calls on corporate leaders to commit to specific actions and targets designed to end systemic racism and create opportunities for BIPOC communities across their organizations.
Among these underrepresented communities are Indigenous peoples.
Despite some progress, Canada’s corporate sector has much work to do in accelerating representation and participation of Indigenous peoples on corporate boards, in management and across companies’ operations, including as employees, suppliers and business partners.
More and more Canadian companies and investors recognize the business benefits of building diverse teams that include Indigenous peoples and advancing the broader goals of reconciliation and anti-racism.
Our latest research on a sample of Toronto Stock Exchange-listed companies suggests that corporate disclosure practices are generally trending in the right direction as companies slowly recognize the value in tracking and providing stakeholders with information about reconciliation and Indigenous relations.
For example, of the 78 companies sampled, 28 per cent provide data on Indigenous representation on boards. The study also found that since 2016, there has been a significant 28-per-cent increase in companies that reference Indigenous heritage or identity in board of director diversity policies, and 22 per cent in senior management policies.
The disappointing truth, however, is that increased disclosure has not yet translated into increased representation of Indigenous peoples in corporate leadership.
Among the 78 companies, none actually disclosed having Indigenous board members. Moreover, a recent universal review of 2020 diversity disclosure practices at Canadian public companies reaffirmed that, among companies that disclose numbers, Indigenous directors make up just 0.5 per cent of board positions. With Indigenous peoples making up approximately 5 per cent of the Canadian population, the current figure falls far short of being adequate.
So how do we encourage companies to increase the pace of change with regard to Indigenous representation? How do we accelerate the shift from disclosure to real world change – from talk to action?
The onus is on regulators, companies and investors alike.
Regulators in Canada have taken some important initial steps. Enhanced diversity and disclosure rules in recent amendments to the Canadian Business Corporations Act made 2020 the first year that federally incorporated companies were required to disclose whether they had directors who were visible minorities, of Indigenous heritage or persons with disabilities.
We have been urging provincial governments to extend these rules to provincially-registered corporations to foster Indigenous representation across the Canadian business landscape. Ontario should take the lead by adopting the recent recommendation of its Capital Markets Modernization Taskforce to require corporate issuers to set targets for BIPOC representation on boards and executive leadership – better yet, benchmarked against ambitious percentages that redress historical underrepresentation more aggressively.
Companies themselves must set aspirational targets to improve the representation of Indigenous peoples as board directors, employees, business partners and suppliers. More publicly traded companies should commit to the BlackNorth Initiative pledge, which incorporates critical aspects of anti-racism education – also a recommendation of the Truth and Reconciliation Commission Call to Action 92. Companies should also adopt supplier commitments and join comprehensive efforts like the Canadian Council for Aboriginal Business’ Progressive Aboriginal Relations certification program.
Finally, investors need to vociferously support these actions by regulators and companies. And where companies fall short, they must also use the stewardship tools available to hold companies accountable. This includes exercising their proxy voting rights to support calls for greater Indigenous representation and consideration of votes against directors when genuine progress is not being achieved.
Senator and TRC commissioner Murray Sinclair reminds us that “Indigenous people and people of colour standing up and saying, ‘Enough is enough,’ is one thing … [but] the people in charge of the institutions that we’re trying to address really do need to take stock of what they’re doing, and change the way they do business.”
One important place to start is to ensure our institutions are representative of the communities and populations we serve. Canada’s corporate boardrooms and C-suites are a far cry from this goal, but momentum is building and now is the time to move from talk to action and accelerate Indigenous representation and participation across our economy.
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