When Ontario nominated Maureen Jensen as chair and chief executive officer of the Ontario Securities Commission in 2016, the provincial government praised her for battling sexism in Corporate Canada.
The Liberals were in power at the time, and the OSC had established new rules requiring companies listed on the Toronto Stock Exchange to disclose how many of their directors and senior executives are women. Known as “comply or explain,” the regulations, which took effect in late 2014, also require publicly traded companies to reveal internal targets for promoting women or spell out why they don’t have such goals.
Shame can be a powerful motivator, so the OSC gave companies a three-year deadline to give women a fair shake. Businesses had until the end of 2017 to show meaningful progress on women’s advancement or the regulator would toughen up the rules.
That deadline expired almost two years ago and public companies are still only making piddling progress. The OSC has yet to follow through on its warning, but the regulator’s inaction isn’t because Ms. Jensen has lost her passion for the cause. Rather, it’s apparent that she’s being stymied by the current government – just as the Progressive Conservatives have done on other initiatives to modernize capital-markets regulation.
Although the Ministry of Finance and the OSC declined to comment, tensions between the provincial government and the regulator are the talk of the Street. As late as March, 2018, the OSC had said it was committed to strengthening comply-or-explain rules, but after June of that year, when Premier Doug Ford came to power, the commission became silent on the issue.
That’s a shame. The OSC’s current statement of priorities highlights public support “for action to address environmental, social and governance (ESG) factors including the need for enhanced ESG disclosure by companies and continued focus on the women on boards and executive positions and diversity issues.”
But the OSC can’t act unilaterally. Its mandate comes from the provincial government, which explains the regulator’s carefully worded explanation for its sudden inertia on this file. “Although the OSC did not add a specific priority related to these issues, these issues will continue to be very important and the OSC will continue to monitor developments in this area,” the regulator said in an e-mailed statement.
That’s a stark contrast to the OSC’s statements under the previous government. Ms. Jensen’s predecessor, Howard Wetston, practically gushed when he praised the Liberal government for making women’s advancement a priority.
“Obviously, we look at this as a partnership,” Mr. Wetston said during an OSC round-table discussion in October, 2013, according to a transcript. "We have tools to accommodate initiatives, and the Ontario government recognizes that, but I want to single out their interest and their leadership in this matter.”
Former premier Kathleen Wynne was a vocal proponent of removing barriers for women. Her government implemented a plan to promote women in corporate leadership, and leaned on companies to set a target of appointing a minimum of 30-per-cent women to their boards of directors. Companies were supposed to set that target by the end of 2017 and then achieve it in three to five years.
A spokesman for the Ministry of Finance, Marc Pichette, declined to say whether that remains the Ontario government’s goal for public companies. Instead, he provided highlights from the OSC’s latest review of comply-and-explain disclosures that was released on Oct. 2.
“Companies that adopted a policy relating to the representation of women on their board increased to 50 per cent from 15 per cent in the first year," Mr. Pichette wrote in an e-mailed statement. But, overall, “board seats occupied by women increased to 17 per cent from 11 per cent in the first year.”
That’s pitiful. That the provincial government would offer these talking points only underscores its disdain. Regrettably, the Ford government has a made a habit of stonewalling securities regulators on ESG issues even though investors are demanding more transparency from companies.
Take, for example, the weakening of climate change-related disclosures. Prior to the provincial election, the Canadian Securities Administrators (CSA), an umbrella group for provincial securities regulators including the OSC, said it was considering new disclosure requirements that would compel companies to disclose climate change business risks.
But after Ontario’s change of government, the CSA did an about-face, saying it was only offering “guidance” on how companies might prepare climate-change risk disclosures.
“This notice does not create any new legal requirements or modify existing ones,” the CSA said on Aug. 1. It’s no surprise given the Ford government’s dubious climate change plan, which was criticized by Auditor-General Bonnie Lysyk for not being based on “sound evidence.”
This administration seems allergic to any kind of regulation that serves the public interest. Last week, securities regulators moved ahead with a plan to ban deferred sales charges on mutual funds in every province except in Ontario.
Provincial securities regulators first proposed the ban on early withdrawal fees in 2018 after a six-year review. But the Ford government came out swinging against the ban, a surprise move that undermined the OSC and frustrated investor advocates.
Although the OSC says it will continue to work with the CSA “to identify opportunities to improve ESG-related disclosure,” it’s powerless to act without the approval of its political masters.
For his part, Mr. Ford seems determined to prove that he’s anything but a progressive conservative. His callousness on ESG issues, and on women’s advancement in particular, will come back to haunt his government.
Investors and voters are one and the same. And as Ms. Jensen once said: "The status quo is not an option.”