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Wayne Kozun, senior vice-president of public equities with the Ontario Teachers' Pension PlanMatthew Sherwood/The Globe and Mail

The giant Ontario Teachers' Pension Plan wants the province's securities regulator to require all public companies to have at least three women on their boards, saying a voluntary option is unlikely to have much impact.

Teachers outlined its bold proposal in a letter submitted Friday to the Ontario Securities Commission, saying companies that fail to have at least three female directors after a transition period – which it suggests setting at 2020 – should be delisted from the Toronto Stock Exchange.

The idea goes far beyond a "comply or explain" policy proposed by the OSC to boost the number of women on Canadian boards by asking companies to voluntarily report each year their efforts to improve board diversity or else explain why they have opted not to make the disclosure. The OSC proposal has been seeking public comment since July with the comment period closing Friday.

Wayne Kozun, senior vice-president of public equities at Teachers, said in an interview Monday that a decade of voluntary efforts in Canada to spur more gender diversity on boards has had little impact.

"This is something that people have been trying to promote for over a decade, and the numbers just are not showing any substantial progress in increasing female representation on boards of directors," he said.

"In other instances, we haven't necessarily found 'comply or explain' very useful, and what you would likely end up getting is no real change, except people would just explain it by saying, 'We were not able to find enough qualified women, so we remain with just zero women on our board, or one woman on our board.'"

In its comment letter to the OSC, Teachers noted that Britain introduced a similar voluntary regime in 2011 and is now threatening to transform it into a mandatory quota because the growth in women on boards has stagnated after an initial increase.

A report released Monday in the U.K. shows the number of women on the boards of Britain's 250 largest companies has climbed to 14.9 per cent from 7.8 per cent in 2011. Women account for 19 per cent of directors of FTSE 100 companies.

In Canada, women account for about 11 per cent of directors on the boards of companies in the S&P/TSX composite index, a number that has barely moved in recent years.

Mr. Kozun said Teachers felt three women was a reasonable number to propose because research has shown it is a minimum level for a board to substantially benefit from diversity.

The pension fund, which manages $130-billion of assets, said research shows companies make better decisions when their boards are more diverse.

Teachers has four women on its board out of nine directors, including chairwoman Eileen Mercier.

The Teachers' proposal suggests companies with extremely small boards could instead adhere to a "scaled" standard, such as the 40-per-cent threshold for women used in Norway.

The OSC has posted over 60 letters commenting on its proposal as of Friday, many of them from companies, individual corporate directors and advocacy groups supporting the voluntary comply-or-explain proposal. Few have proposed a mandatory requirement for women on boards.

British Columbia Investment Management Corp., which manages $100-billion of assets for B.C. public sector pension plans and other bodies, said a "comply or explain" approach is unlikely to work on its own, and recommended the OSC also include a voluntary target for companies of 30 per cent women within three years. BCIMC said the target would not be a mandatory quota.

Supporters of the OSC's voluntary approach include the Canadian Council of Chief Executives, the Canadian Coalition for Good Governance, and the Institute of Corporate Directors.

Individual companies that submitted a comment letter supporting the voluntary model included Royal Bank of Canada, SNC-Lavalin Group Inc., Precision Drilling Corp., Gildan Activewear Inc. and Bombardier Inc.