Canadian securities regulators should make gender-diversity policies mandatory for companies on the Toronto Stock Exchange after a majority of companies rejected voluntary standards this year, according to Women's Executive Network founder Pamela Jeffery.
Ms. Jeffery, who heads the Toronto-based advocacy organization for women in business, told an Ontario Securities Commission round-table forum that Britain's corporate governance code requires companies to report annually on their diversity policies, and the country has seen rapid improvement in the proportion of women on its boards and in senior executive roles.
"Given that only 14 per cent of [Canadian] issuers have disclosed the adoption of a written policy, we'd like to see issuers required to disclose a written board and executive board diversity policy," Ms. Jeffery said.
Canadian companies should also be required to report annually on their internal targets for women, she said.
The OSC forum Tuesday was organized to discuss compliance to date with new voluntary standards, introduced this year, that recommend companies should create gender-diversity policies to get more women in senior roles.
A report released Monday by securities regulators shows only 14 per cent of 722 TSX-listed companies have created formal diversity policies in the wake of the new standards, while 65 per cent said they have decided not to have a policy and a further 21 per cent reported only informal policies or policies that do not mention gender diversity.
Osgoode Hall law professor Aaron Dhir, who specializes in issues of corporate diversity, told the OSC forum his research shows Australia and Britain both saw significant increases in the proportion of women on their boards after they introduced new reporting standards.
In Australia, for example, the proportion of women on ASX 200 boards grew to 20 per cent in 2014 from 8 per cent in 2011 after regulators introduced a rule similar to Canada's new standard. In 2011, 61 per cent of Australian companies reported having a diversity policy, which has grown to almost 100 per cent this year, Prof. Dhir said.
Canada's new standard is one of the best Prof. Dhir said he has seen compared to diversity rules in other countries like the United States, but companies need time to respond. He is "cautiously optimistic" more will adopt diversity policies in coming years.
Alex Johnston, executive director of women's advocacy group Catalyst Canada, said she thinks Canada's voluntary approach is appropriate for now, and she doesn't believe mandatory diversity policies are necessary.
Katherine Rabin, chief executive of proxy advisory firm Glass, Lewis & Co., said institutional shareholders who are clients of her firm are becoming more interested in gender diversity at companies they own. She told the forum she expects many will push companies to improve their diversity in the 2016 proxy voting season.
"Fund managers and pension funds are definitely focusing on this issue going into the season, so you'll see the impact of that next year," she said.
The business community is still divided on setting targets for women, and there is a lot of confusion about the difference between voluntary targets and mandatory quotas, Canadian Imperial Bank of Commerce chief executive officer Victor Dodig said. Mr. Dodig revealed Tuesday his bank has decided to adopt internal targets next year for women on its board and in executive roles.
Ms. Jeffery also expressed optimism that change is happening on the ground. In the years before 2012, the proportion of women on Canadian boards was growing by between 0.25 per cent and 1 per cent each year, but that pace climbed to 1.67 per cent annually between 2012 and 2014, she said.
Women filled 17.1 per cent of all board seats as of Dec. 31, 2014, she said. If that pace continues, she said Canadian boards would reach gender parity in 20 years.