Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Laurel Broten swears in as Minister of Intergovernmental Affairs and Women's Issues of Ontario in the Legislative Chamber at Queen's Park in Toronto February 11, 2013.

Jon Blacker/Reuters

Ontario's plan to use a "comply or explain" approach in its efforts to increase the number of women on corporate boards and in senior management roles is a smart and welcome idea, but it will be need to be monitored closely. The EU and the United Kingdom, where the idea originated, have seen mixed results, a fact the Ontario government needs to be honest about.

Laurel Broten, Ontario's minister responsible for women's issues, said Monday her government is working with the Ontario Securities Commission to find ways to compel companies to hire more women in senior positions. By one count, women fill only 10 per cent of the seats on the boards of public companies. Tellingly, Canada, unlike many other countries, has no quotas for women on boards and doesn't require any disclosure on the matter.

Using a "comply or explain" approach would be a good way to begin to turn things around, and, as the OSC's rules govern any public company traded in Ontario, it would have a nationwide impact. The idea was developed in the UK as an alternative to a one-size-fits-all regulatory framework. Regulators set a code of conduct that companies must either comply with or, failing to do so, provide justification on an annual basis about why that is the case. This allows companies to adapt to the spirit of the code without being narrowly restricted, and it permits shareholders to take companies to task when their explanations of why they have deviated from the code aren't adequate.

Story continues below advertisement

In the best of all possible worlds, "comply or explain" even has a market impact, as it is possible that shareholders will sell their shares in a company that falls short in either the compliance or explanation departments.

Various studies on the impact of the "comply or explain" model in European countries tend to all reach the same conclusion: that it has been effective in some areas, such as in getting British companies to hire more independent directors, and a failure in others, such as Germany's efforts to get companies to disclose their remuneration of board members. The bottom line is that this is a voluntary regime that places its hopes of success on the goodwill of companies and the vigilance of shareholders and other stakeholders.

Ontario is smart and forward-thinking to consider the "comply or explain" model, and there is every reason to believe it could help improve Canada's poor track record when it comes to women in senior roles. It is a far better option than enforced quotas, but it will only work if there is a concerted effort on the part of all stakeholders to ensure that it does.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies