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Diversity in corporate Canada: Is progress being made?

Dec 16, 2022

Time: 55 min  Date: 2022/12/16


In October 2022, Osler released its eighth annual Diversity Disclosure Practices - Diversity and leadership at Canadian public companies. The report looks at how well companies listed on the Toronto Stock Exchange and governed by the Canada Business Corporations Act are doing at working to improve diversity in senior leadership positions. This includes increasing representation of women, members of visible minorities, Indigenous peoples, and persons with disabilities in senior leadership positions.

In this episode, guest host Colleen Moorehead, Osler’s Chief Client Officer, moderates a discussion about the report’s findings with regular podcast host and report co-author John Valley and Deborah Rosati, Founder & CEO of Women Get On Board.

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Colleen Moorehead
Colleen Moorehead
Special Advisor


John M. Valley
John M. Valley
Partner, Corporate and Chair, ESG
Deborah Rosati
Deborah Rosati
Corporate Director, Founder & CEO, Women Get On Board Inc.


COLLEEN MOOREHEAD: In today’s episode of our podcast, we discuss the results of Osler’s Diversity Disclosure Practices report. I amColleen Moorhead, Osler’s Chief Client Officer and today I am joined by my colleague John Valley. John is one of the authors of the report, a partner at Osler and also the Chair of our ESG practice. I am also delighted to welcome Deborah Rosati to the podcast. Deborah is  founder and CEO of Women Get On Board, a 850+ member-based company that connects, promotes and empowers women to corporate boards. Thank you for joining us, John and Deborah.

Deborah, why don’t you start by telling us about Women Get On Board.?

DEBORAH ROSATI: Thank you. Delighted to be here. Thank you for having me join you on your podcast. I appreciate the opportunity to share Women Get On Board. It is my social purpose.

And I founded the company in 2015 with our mission to connect, promote, and empower women to corporate boards. And our goal is quite simply to get one more woman on a board, one board at a time. We have over 850 members across Canada. They are diverse in skill sets, expertise, ethnicity, race, ages, and stages of their board journey.

I would like to thank Osler for being a founding corporate partner from inception, right through to more recently an empowered sponsor for our inaugural Women Get On Board Summit that took place in May 2022. And that really aligns to the empowerment piece, which is to help our members, empower them to have more confidence and lead and serve on corporate boards. So this podcast is perfect because I know our members will really appreciate it.

COLLEEN MOOREHEAD: Thank you for that, Deborah. And we think you're the perfect guest to join us on today's episode. So I think we should start with a little bit of background. John, why don't you give us a sense about the original impetus for this report?

JOHN VALLEY: Deborah, great to have you with us today. And I think, really just a great partnership over the years and really runs the lifespan of the report in some ways.

So this is the eighth edition of the report. And we started putting the report out in response to changes in the securities law in Canada that required issuers to provide disclosure with respect to gender diversity in their annual information circular each year.

And what started small has grown. In this year's report, we gathered over 125,000 individual data points to generate the data in the report, just to give you a sense of the scale. And it's a real team effort. And it's the sort of thing that we think is important both to share the data-- what gets measured gets managed, as the old adage goes-- but also to provide a roadmap for public companies in Canada and other companies and organizations as well to help provide a roadmap as they think about diversity in their own organizations and increasing diversity on boards and in senior management positions.

It's something that we think is really important. And that roadmap aspect to it is really perhaps the key piece of the report. And it's something that we hope really provides value to issuers now and as we move forward.

COLLEEN MOOREHEAD: So, John, you mentioned that the report started in 2015. How has that report evolved over time?

JOHN VALLEY: Sure. I think it's changed in some important respects. One is it was started in response to the securities law disclosure requirements with respect to gender. And in the early years, that was really the focus. We've started since that time gathering additional data points beyond the specific securities law form requirements and looking at other things, for example, the number of female CEOs in the data set that we're looking at, the number of committee chairs who are female, the number of board chairs who are female. And that's been important in providing some insights into where things are going, what the pipeline looks like, how women are progressing along their own board journeys, as Deborah mentioned, from joining the board to becoming a committee chair and ultimately to serving as board chair in some cases. So it's a helpful marker. And that's something that we've tried to do over time, is pick up some of those additional data points.

But perhaps the biggest change was in 2020, when the Canada Business Corporations Act, the federal corporate statute was amended. And the amendments came into force to provide that all public companies who are governed by the CBCA are required to provide disclosure in their management proxy circulars, so the same document as the securities law requirement, but to provide that disclosure with respect to not only women, but also to look at a list of groups that are called the designated groups under the statute, but visible minorities, Aboriginal peoples and persons with disabilities, and to provide a breakdown of the representation of those groups on their boards and in their senior management position. So it's really a big change.

And for the first time, we were able to get a data set-- because we rely on the disclosure that issuers provide to generate the data, and so for the first time in 2020, we were able to access a set of data that address diversity characteristics beyond gender. And that to us was a really big change and a significant development in what we're able to do with the report and what we're able to share with those who read it.

COLLEEN MOOREHEAD: That's great. So you're taking publicly available information, taking the data, and you're drawing conclusions from that data. So what are some of the key takeaways from this year's report, John?

JOHN VALLEY: So I think probably the main headline this year is that we crossed a couple of important thresholds. It has been a slow journey. And for anyone who's been following the report over its life, there are a lot of years where we will start saying, at the board level in particular, there has been slow but steady progress, not as significant a gain, not as quickly as we'd like, but there has been progress.

And when you look at it one year at a time, that's how it feels. But when we look back this year, we for the first time saw that our TSX companies, so the core of our data set, had 26% of the board seats were filled by women. That's the first time that we've crossed the 25% threshold. That is halfway to parity. Is it the end of the journey? No. But it's an important waypoint and it's something we should talk about.

And again, as I say, we get focused a lot of the time on what the current year tells us in the data. But when you step back and think about 2015, when we first reported on this, that number was 10%. So over the life of the report, there's been a 260% increase in the number of women represented on boards among the TSX-listed companies.

That's something we should stop and think about because that is significant. It's taken a long time. It's taken a lot of hard work. And there's more work to do, certainly. But that's a big change and something we want to stop and highlight.

And we've seen that trend through the other subset of issuers that we look at. S&P/TSX Composite Index Company, so the 240ish largest companies on the TSX, they're now at one third women. Again, an important threshold and the first time that we've crossed that threshold in the time we've been doing the report. And among the S&P/TSX 60 companies, so the 60 largest companies on the exchange, the number of women hold 36% of all board seats on those companies.

So that's good progress and starts to put us in line with what we're seeing internationally. There are lots of things to talk about. But I think having hit those milestones is an important theme this year.

COLLEEN MOOREHEAD: I'd say so. And, Deborah, you probably keep an eye on all this type of data. What jumped out at you looking at Osler's most recent report compared to other reports that you've seen and also the historic trends? What kind of progress have you seen so far?

DEBORAH ROSATI: I've been following this report for the last eight years. And to John's point, it's kind of had incremental changes year-over-year. But when you step back, I have to say I was really encouraged. And I looked at that highest level milestone that was reached when, John, you referred to 26% of all TSX-listed companies had women on the board. And, as you said, that's halfway to parity.

And if you can refer to there was a time where Catalyst had an accord. And they wanted to have 20% of women on board. So it's exceeded that.

If you look at down in the US, there's an organization-- it used to be called 20/20 Women in the Boardroom. And now they changed it to 50/50 in the boardroom, so getting to 50% by 2050. I know I'm not going to be around reporting on it. And to me, that should be closer in rather than further out.

So if you just look at some of those metrics, and then there's the 30% Club. And their mandate or pledge was very much about-- and it's worldwide, but there's a 30% Club in Canada. And it was to get to 30%.

So, John, if you're referring to the TSX Composite 240 listed companies and the S&P/TSX 60 Composite Index, they've met that threshold. So if you look at it in its total, we're, again, setting those measurements and working towards them has been a critical factor. So I like the looking back over the eight-year period to really kind of step back and go, wow, that has changed.

There's still room for change. There's still room for progress. But I think with having reports like this, having institutional investors around the table putting pressure-- and I know we'll go into some more of the highlights in the report with respect to targets and disclosure, that really stood out.

And then I think the other data point that really stood out to me for the first time there were no all-male boards on this S&P/TSX Composite Index companies and none on the S&P/TSX 60 companies. So I think that's significant. And then if you take across all TSX-listed companies, only 11.6% have no women directors compared to 47.5% in 2015. To me, that is significant.

And there is the power of three. One woman on a board is token. Two women on the board is presence. And three women on a board is a voice. And we're tracking towards that.

And I have been a token many times. I think it's my duty, it's my collective responsibility to go in there and prove otherwise. But that collective of the power of three can really move, I think, the needle even further.

JOHN VALLEY: And I think it's interesting, Deborah, you talk about the power of three. And one important point as well, among the 60 largest companies on the TSX, there now none of those who provided disclosure by our July 31 cutoff who have fewer than two women on the board. So that, again, is a sign of the progress.

And when you look at the number of companies with 50% or more on the board, it used to be when we did the report, we could include the list inline in the narrative because the list was so short. And this year for the first time we had to break it out into a column box because the number jumped by almost 50% compared to even just last year. So there are 27 companies in the broader TSX data set that had 50% or more women on the board. So again, you talk about the progress. And it's still more to come and still more work to do. But certainly that is consistent with your rule of three.

DEBORAH ROSATI: Agreed, John. I think it's looking at it. Instead of turning it on its head and saying what we're not doing, it's turning it around. And you pause to say, hey, we should celebrate this. And we can continue to evolve. And don't forget.

And I know we'll talk about it. We have a very soft comply and explain regime in securities law in Canada. And so it's not force. There's pressures. There's policies. There's targets. There's a lot of ways to make that progress. But overall, back to your question, Patrick, I was encouraged.

COLLEEN MOOREHEAD: And did any of those particular noteworthy statistics jump out at you or surprise you, Deborah?

DEBORAH ROSATI: The one that still I'd like to see the number higher, 7.4% of number of chairs of boards are women. And I think if we're at 26% collectively, why is that number so low when the women are rising to the top, they've proven themselves? Is that they're not putting their hand up? Is that they're not being considered? Do they have imposter syndrome? They don't think they're worthy of it?

I don't know what it is. But I do feel the more women that we have in leadership roles, whether it be committee chairs or chairs of board, will only help elevate that next generation. And so I still feel the data point for women that are CEOs, it's 5.3%. So it's higher for chairs of boards that are women versus women CEOs. But I think collectively we can do better there. And I'd like to see that continually go up in time.

COLLEEN MOOREHEAD: Of course. And as, John, you alluded to earlier, what gets tracked gets measured. Deborah, you alluded a moment ago to the requirements regarding disclosure to either disclose or explain. John, I think if you can help our listeners out explaining that concept.

JOHN VALLEY: Sure so we do have a bit of a unique system. And when we talk about comply or explain, usually there is some measure that you're supposed to achieve or explain why you haven't achieved it. I mean, we've got a modified version of that in the sense that we say, "For example, disclose whether or not you have a target. And if you don't, explain why not." So,  we don't tell people what the target is. We just ask them to disclose whether or not they have one, and if they don't, to explain why not. And that is helpful in the sense that it provides issuers with some flexibility in terms of how they think about this, how they choose to measure things. It acknowledges the fact, particularly in Canada, we have an issuer population where there are some very large issuers, certainly, but we also have a number of smaller issuers for whom some of these things do take a little bit of time, where they may tailor their approach to reflect the size and resources of the organization.

And so that's the basis for it, that flexibility can come at a cost because you can end up with some variable disclosure in terms of how thoroughly people talk about, for example, the reasons for not having a target or for not considering the representation of women in executive officer positions. And there are some fairly easy tropes to fall back on in terms of defaulting to, well, we believe in the principles of meritocracy. And we don't have a target or we don't consider the level of representation of women in our executive officer ranks.

And that on its own without more, candidly, isn't very persuasive. And there are issuers who have chosen not to have targets or who don't specifically consider the representation of women who actually go on to provide some very good disclosure as to why they have made that choice. And that's, again, part of why we've got the report. It's not to tell issuers what the answer is. It's to help issuers at the end of the day figure out how to communicate effectively about where they are in their consideration of diversity in their organization and to provide some tools to help them do that. And we can talk about that in a bit more detail later.

But that's the gist of it. There's no specific requirement under the securities law or the CBC that says, you must achieve this outcome. It's a requirement that if you don't have a target that you explain why. And so it's to try and promote some communication to stakeholders about what you are doing and what you're thinking about in the organization.

DEBORAH ROSATI: So, John, just thinking out loud on this diversity disclosure, I think there's this concept out there in ESG about greenwashing, right, just putting it down there but not doing it. And I think this could apply here.

So if you are actually consciously thinking about your diversity disclosure, it will be more likely that you'll think about it because you've got to fill out the numbers. And if you go to the next year, your proxy circular and you haven't made change, it could be a reflective, right? And if people are knowing it makes good business sense and that this is institutional investors leaning in on it and there's pressure points all around, then by having a board diversity policy and even having targets can help in that direction because if year-over-year you're not making change and year-over-year you've got to explain why you don't have diversity, over time I think you might be beaten down a little bit in the sense of, OK, shamed into it or whatever you want to call it.

And, as you said, there was 27 companies in the collective TSX, I think, composite and that had over 50%. So it can be done. You just have to be intentional. It doesn't mean you're going to show up on day one. And I think that power of intention to have diversity is a mindset.

JOHN VALLEY: And I think that's one of the things that we did see this year that was a big difference. And you talk about the influence of the institutional investor community and some of the proxy advisory firms, so ISS and Glass Lewis, for example, and some of the changes that they have made in the voting guidelines that they have in place for their institutional shareholder members, both the institutions themselves in some cases and the proxy advisory firms have put in place guidelines with respect to what they expect to see from a diversity perspective. And one of the key things that they have focused on is this idea of having a target of at least 30%.

And we've seen investors react. Or sorry, we've seen issuers this year react to that. We had a number of issuers disclosing that they had a target for the number of women on their boards increased by almost a third this year. So we're up over 40% for the first time ever. And last year at almost a third, we thought we'd seen good progress. So it's really encouraging in some respects to see those targets in place.

Now, admittedly, a lot of the companies who've already achieved the target have adopted the target. But there is an element of once you've got it, that's a yardstick against which you know that you'll be measured and that you can measure yourself over time. And so I think having those targets in place is something that over time will serve us well as we look at progress moving forward.

COLLEEN MOOREHEAD: Yeah, I'll come back to targets in a minute, but I am curious to understand whether investors or advisors are willing to accept situations where companies choose to explain rather than disclose. What's your read on that, John? And I'm curious to hear your views, too, Deborah.

JOHN VALLEY: So it's interesting. And there are certainly examples over the past year where companies have not had or achieved the level of diversity that the proxy advisory firms, again, for example, have outlined in their voting guidelines, which issuers have access to. And what they have done in those cases is recommend that shareholders withhold their votes from the election of certain directors on the board, so typically the chair of the nominating committee who would put the directors up for election or not recommend the directors for election at each-- sorry, Roberto, I'm going to have to go back there.

Typically they'll recommend withholding from member of the nominating committee that is responsible for identifying the directors that the board will put up for or the nominees for elections, directors that the board will put up at each annual meeting. So that is pretty powerful. You're saying to directors, we will not vote in favor of your election if you have been-- if you have failed to achieve the requisite level of diversity as we have defined it.

And so that's certainly a change. And that's, again, part of why I think one of the things that they look at is the adoption of targets. There is some scope to explain in some respects. But the proxy advisor voting guidelines are generally pretty clear, that they expect you to have 30% or more and they expect to have targets, that those sorts of things are hardening. It's not a mandatory quota, but it's something that they are looking at.

And it would be hard, I think, to really explain your way out of not having done that absent some sort of extenuating circumstance. You may have had a sudden change in the composition of your board that's a result of an unexpected circumstance. I think those sorts of things you could explain away for a given year. I don't think it would be right for those hard rules to be applied dogmatically and without exception. But I think they have been pretty clear that they expect that people will comply with what they put in their voting guidelines or they will have the right and they have over the past year of recommend that the shareholders not vote in favor of those directors who've run the nominating process.

COLLEEN MOOREHEAD: And Deborah, what's your reaction? Other than those extenuating circumstances that John alluded to, what's your reaction when you see that companies choose to explain rather than disclose or adopt?

DEBORAH ROSATI: Well, as you know, I'm an advocate for change. And I keep fighting the fight every day. I get calls from individuals where it's a publicly listed company and they have no women on the board and they're like, hey, are you in-- for me personally, are you interested? We need someone to chair your audit committee.

And I kind of would like to say my response is, hey, it's 2022. Are you just thinking about it now? Or I get calls that go, hey, we're about to go public in six weeks and we have no diversity on our board. Are you interested? And I know a lot of these individuals. And I just say to them, well, so why are you just thinking about it six weeks out before you're going public?

So I think some of that, those conversations can start a lot earlier. And I think as advisors, as Osler would be to your clients, and as women get on board in other organizations and executive search firms, I think that collective thinking about it before you go public and then when you do go public because, John, I know that Osler's report is tracking when they go public, but we did a report last year with a partner, irlabs, and we looked at all the companies in 2021 that went public either on the TSX or TSXV or up listed from TSXV to TSX. And collectively, which was very, very surprising, that only 15% of those 237 companies that listed for new listings in 2021 had women on their board.

And so I kind of put it out there and go, not only can the institutional investors have impact on the publicly listed companies, but we should be starting earlier in the process. And there's no reason why-- a company coming to market to go public, you're being held to a very high standard of governance. And having diversity on your board is good governance. So, I mean, I could go on about that. But I do think you can start earlier and you can ask the questions.

COLLEEN MOOREHEAD: And it sounds like part of that process is the adoption of targets potentially. I guess my first question for both you, Deborah and John, I mean, is a target the same as a quota?

JOHN VALLEY: So no is the short answer. So a quota-- and, Deborah, you can, obviously, jump in. But I think a quota is something that's imposed. So that would be the law saying, boards must be comprised of at least 40% women, for example. And that's a legal requirement. And in some cases, it might be achieve that specified percentage or explain that. That would be a quota.

A target is something that the company will have looked at and adopted. I think is there's some nuance, but I think that's the key difference. One is externally imposed. The other is something that in the way that we're talking about it is something the company has chosen to adopt as its own objective.

And I think that's really a key difference because one is, as I say, it's external. It doesn't account for circumstance, size, sophistication of the organization, whereas the other, the target and the self-adopted target is something that the issuer can look at, its age and stage and its capabilities and its industry or the other circumstances, and it can pick something that it thinks makes sense and that is achievable for a company in its current state.

DEBORAH ROSATI: So, John, I might just add to that, that was really-- I think it is really important to know the difference between quota and target. And I think John did a very good job of outlining the external versus the internal. But I would even go a little step further on the external. So let's take one of the first European countries to put a quota in was Norway in 2008. And it was 40%, as, John, you alluded to.

But they actually had a consequence. If you did not get to 40% at a certain point in time, you would-- that company could potentially be delisted. So there were consequences with some of the quotas, so kind of like walk softly, carry a big stick. And so not all quotas have consequences. But I think the impetus for those external from a regulator's perspective sometimes have consequences that could be quite detrimental to the listed company.

COLLEEN MOOREHEAD: From an advocacy perspective, Deborah, I'm left with the impression that there is occasionally a negative connotation associated with a concept of a quota. I mean, do you agree? Is that a fair assessment? And is it a helpful distinction? Or is it helpful to draw a distinction between targets and quotas from an advocacy perspective?

DEBORAH ROSATI: I get asked that question. And I have been in many conversations on it. And I'm not a proponent of quotas because they're externally driven. And then you can kind of have a backlash.

But I think targets are a good approach because those are self-adopted, as John said. And I think if you're going to put that out there, then you're going to be measured against it. And you're going to work towards it. You're going to have all your stakeholders, be it your investors, your employees, your pensioners, whoever, your customers, your suppliers looking at you. So I think that's a big threshold to get to.

And I don't necessarily know if quotas have the best results, to be honest with you. I think targets are a very good-- and one thing I was very encouraged by your report, there's been a greater adoption of dark targets, as you have in your report. And you had identified that 79.5% of S&P/TSX 60 companies provided targets. And it was 41.4% of TSX-listed companies. So you're not quite at 50%, but that's a significant measurement in the number of companies that are adopting targets.

COLLEEN MOOREHEAD: Yeah, John, are you seeing that? Is the data showing that there has been a marked increase in the adoption of targets? Is that happening year-over-year at an accelerating pace? What does the data suggest?

JOHN VALLEY: Yeah, so it's certainly increasing over time. I mean, 2018, just as, again, pulling back, as we've done on a couple of the other data points, at 2018 we had 17% of issuers disclose that they had a target for the representation of women on the boards. And now we're 41%. And so over that five-year period, that's a pretty significant increase. I'll call it two and a half times.

And that's, again, driven by-- we talked about external things. That's in part driven by some of the change in institutional shareholder expectations, some change in voting behavior. Right, if you don't comply with the voting guidelines, we will recommend withhold votes. And I think that's had an impact.

And a lot of the targets-- now, the other thing when we looked at the data anecdotally, we don't report this specifically in the report, but it used to be that you would see some of the targets that Deborah alluded to earlier at the 20% or 25% level. And now the overwhelming majority is at 30%, which is consistent with what you'd see at ISS or Glass Lewis or things like the 30% Club, right? There is a natural gravitation to a 30% or 33%.

But increasingly, we're seeing targets in the 33% range and up to 40%, which is a meaningful target to have. And they all are compared to where we were in 2018, when only 17% had any target. And so to see people really pushing onwards to a third and upwards of 40% is encouraging to see.

COLLEEN MOOREHEAD: So the establishment of targets strikes me as sort of a minimum starting point. But once women are on boards, Deborah, where do you think women can make the most impact? Is it just in chair roles or in what respect?

DEBORAH ROSATI: There's a lot of data out there that basically shows that the more women on a board, the better financial performance, better ethical decisions, and even more trending on ESG and sustainability results. So I think as women, we have a voice at the table. We're there because we have skills and experience to bring to the table.

I would say as women, we should be putting our hands up for leadership roles, be it chairing a committee, chairing a special committee, being a lead director, being a chair of the board. There's a lot of very experienced women out there that have their various governance certifications and have had experience. And so I think it's our time. We're here.

And I also think the demographic, the average age of board members, I think, is 62 years old. We need to bring those numbers down. And I think you're getting more women-- I know we'll talk about the Great Resignation and various other elements, but I think you're getting more women coming to the table thinking about-- we have conversations all the time with our members in the programs that we run, is there thinking about it, mid-40s, maybe early 40s, thinking, hey, by the time I get to whatever stage I'm going to be, I want to be in a position and I want to be prepared so that I can be an independent corporate director.

So there's a lot more intention building. I get very excited about that next generation of women corporate directors because they are very powerful. And they're very determined. And they're very strategic.

COLLEEN MOOREHEAD: And are there particular roles-- in your experience both sitting on boards and in your organization, are there particular roles where you really see exponential difference making?

DEBORAH ROSATI: Well, I think when John was alluding to chairs of nominating corporate governance committees, where their votes could be withheld depending on the institutional investor, I think that having a female chair of that particular committee can have a huge impact. Not to say that male board candidates that are chairing a nominating corporate governance may not have the same, but you can step back and have that. You can be a voice of a collective voice to say, sorry, this slate isn't good enough. Push back. We haven't looked hard enough.

And I think you have people in those leadership roles, be it chair of board, chair of nominating corporate governance committee, where they have impact on that board renewal or board refreshment. Even looking at from a governance perspective, should you be talking about term limits? Does that help renewal? Should you have defined after 10 years, you're no longer independent, we know in the UK?

So should that be an impetus for board renewal? Should you have age limits? Some of these mechanisms for renewal can sometimes help create the change. And I think those along with targets can actually help facilitate change as well.

COLLEEN MOOREHEAD: I think that's a terrific suggestion in particular, in other words, to focus on that unique role as chair of the nominating and corporate governance committee, a wonderful suggestion. So we've talked a lot about gender in particular. But what other characteristics are we seeing in disclosure at the board level, John?

JOHN VALLEY: Sure. So, as I mentioned, one of the big changes we've seen in the life of the report has been the addition of the requirements under the CBCA for public companies who are governed by that statute to provide disclosure for diversity characteristics beyond gender. And the statute specifically requires disclosure for visible minorities, Indigenous peoples, and persons with disabilities. And that's something as a result that we've now been able to look at and measure over the last couple of years.

And, in fact, we started to see disclosure coming voluntarily from companies that aren't governed by the CBCA who are providing disclosure on certain of those diversity characteristics beyond gender. And that's still, relatively speaking, less common. But again, I think that's a response to what we're seeing from institutional shareholders and some of the corporate governance ranking services who are looking for issuers to provide more and better disclosure about these diversity characteristics that do go beyond gender.

And when we talk about gender, I think the other thing just that we should mention is the securities law disclosure requirement speaks about men and women. And there isn't really a specific call-out in the securities law for gender diverse directors more generally. And that's something that, again, in the course of the report, we haven't seen issuers providing disclosure in that regard. But I think that that's something over the next couple of years we certainly have as an area to watch for some of the developments that we think we may start to see.

But, I mean, we can talk a bit about the CBCA companies and the results that we've seen there. But I think that's, generally speaking, that's been the main driver of where we're getting our data for the report on those other diversity characteristics.

COLLEEN MOOREHEAD: So now that we have the data I think that, obviously, allows us to measure and discuss. Deborah, where do you think the push should be regarding issues beyond gender?

DEBORAH ROSATI: Well, I am seeing it where we will get approached by a company and they'll say, OK, yes, we want to bring a female on the board, but-- and it's defined by skills. But we really would love to have a visible minority. And so they are defining it. And I was, OK, if you want that, then you have to put that in there, so it would be preferred someone from a designated group and specify which designated group. So I think there's more intention that way.

I think building out communities and providing support for designated groups beyond just females-- and, as I said earlier, Women Get On Board, we are diverse with respect to gender, ethnicity, and race. I created Women Get On Board with the focus on women. But I know there's a lot of initiatives that are focused on Latin American women, BIPOC representation. And so it can be done.

And I think, John, if you were to look, if you look, CBCA came out with their designated groups in 2020. And it's 2022. So you've only reported really on two years, right, John? And you're somewhere collectively at 10%.

So if you think about where this visibility is coming in place, then you think back on when you started reporting in 2015 just on female and women on the board, you were at 10%. And look where we are now.

So I'm hopeful by the awareness, the collective interest, and the intention that we can move that needle. And you had to start somewhere. And that measurement is the starting point.

JOHN VALLEY: And I think that's a good point, Deborah, because you look, to your point, about the way that the response to the requirement evolves over time, there are two important things about the CBCA data set. One thing to remember is this year we had 366 companies that we identified who provided disclosure that we counted in our data set. Last year there were only 318. So there were, assuming a relatively constant size of issuer population, we've had basically 50 more companies provide disclosure this year than we did last year. And certainly if you were to go back to the first year in 2020, there was a similarly significant jump.

So we've got more companies that are providing the disclosure at all, which is a good sign. It's starting to root in. And Corporations Canada has done a lot to try and improve awareness of and compliance with the requirement. They had a big outreach in 2021. And so I think that's had an impact.

The other thing that I think we have to remember about the CBCA population in the data set is that because it covers companies that are not or issuers that are not just listed on the TSX, but also on the TSXV, on the CSE and the other junior exchanges, the issuer size is much smaller. So you're dealing with organizations that don't have the size and scale to do necessarily-- to gather the data and to do the reporting because it all depends on self-identification by the directors or the executive officers. And they're also just at a different stage in their corporate lifecycle, where the day-to-day concerns of the management team and the board is a little bit different.

But I think the fact that you're dealing with companies that are smaller on the whole in the CBCA data set-- half of them are on the TSX, but half are not-- really leads to a bit of a different reporting standard that you're getting. And the amount of time in some cases that they've had to really engage with these issues, which, I think, goes, Deborah, to a point that you've made, which is starting to think about some of these issues when you're still a private company rather than waiting until you're public is perhaps an area for some organizations to focus on.

But we have seen a change and, as you say, in aggregate to designated groups as the CBCA defines them. So visible minorities, Indigenous peoples, and persons with disabilities are about 10% of the director population in that CBCA data set. But of that, I think we shouldn't lose sight of the fact that it's very heavily skewed to directors who are members of visible minorities, so 8.3% there compared to less than a percent barely half a percent for Indigenous peoples and persons with disabilities.

So there really is, there's progress. And that 8.3% number is much better than what we saw in 2020. But the but the overall numbers, particularly for Indigenous peoples and persons with disabilities, are still very small, both in absolute terms and in relative terms.

DEBORAH ROSATI: Yeah, John, there was-- I just wanted to pull out a data point or reference point in the report. There were several companies, very large, probably TSX Composite companies, that actually had targets that went beyond gender. And they were focused on visible minorities. And then there was one company in particular that you referenced that had a target for Indigenous people.

And what I wanted to think about is there will be industries that have more of a need, depending on who their stakeholders are and representation, to have those targets. So I think it may not be as collective in all industries. But there would be oil and gas and mining, for instance, might be industries where there might be more targets around a particular designated group, in particular Indigenous. So I think those, I think that kind of reference is also important to take into account.

JOHN VALLEY: Yeah. And I think the other thing that we did see is there are some corporations as well that provide for targets or disclosure with respect to the number of their directors who are members of one or more of the designated groups. And they provide the disclosure for designated groups collectively. And so from our perspective in trying to break the data down, it makes it hard because we can't identify which designated group, as the CBCA defines it, the individual directors are members of.

And that is something that, I think, creates a challenge for us in reporting on it. But I think it doesn't change the result. The numbers in absolute terms are just still very, very low. And there's a lot of room to change.

And the other thing is companies do have the ability to push beyond the designated groups that the CBCA has described, so visible minorities, Indigenous peoples, and persons with disabilities, and look at individuals with other diversity characteristics. And we haven't really seen that happen yet. So again, that's something I think we're looking at as an area to watch as we move forward. Will issuers start to provide some of that disclosure? And again, it all depends on directors being willing to self-identify and having the disclosure in the circular. But it's certainly an area that we're keeping an eye on.

COLLEEN MOOREHEAD: John, so the report highlights some pretty stark results that you talked about. I mean, Deborah, on the ground are you seeing much improvement with respect to those designated categories, visible minorities, Indigenous peoples, and persons with disabilities?

DEBORAH ROSATI: I would like to say I am seeing improvement. I think it's baby steps. So one particular way where Women Get On Board is having a focus, we have a mentorship program, which is a yearlong program. And it's taking aspiring women corporate directors and matching them with accomplished women corporate directors.

And I have sponsors. I wish the whole program was sponsored. It's not. But I do have sponsors that have said, as part of our sponsorship, we would like to see designated-- we'd like to see individuals, women that are aspiring and that come from a BIPOC group, right, so Black, Indigenous, people of color. So that's critical.

And then as I go through and look at the mentors we're bringing on, I'm making sure that there's the diversity there as well. And so it's by intention. And it's not compromising skills or expertise. It's by intention because those individuals are out there, for sure. So just using that as an example.

COLLEEN MOOREHEAD: So we focused a lot so far on disclosure with respect to women on boards. But, John, the report also talks about executive officer positions. Can you quickly highlight some of the trends that you saw in this year's report?

JOHN VALLEY: Sure. And I think consistent with the results year-over-year and when you go back and look at things over the last five or six years, the progress we've seen at the executive officer level has been halting and much, much slower compared to what we've seen at the board level. And there are some reasons for that. There are fewer positions, relatively speaking. They don't turn over as often.

You can increase the board size by one, but it's hard to necessarily add-- harder to necessarily add another executive officer, for example. There's one CEO. There's one CFO.

So it's been a much slower progression. And for a couple of years, I think we weren't surprised to see that. I think to see as little progress over the life of the report as we've seen is one area where I think it's pretty stark in contrast to the optimistic tone that we started the conversation with, where we are now talking about executive officers. It's been a much slower progression. But the average percentage we saw this year for the first time hit 20%. So that's a fifth. That is progress compared to where we started. But it's just it is much slower than we'd like it to be.

COLLEEN MOOREHEAD: So we are seeing some progress. Deborah, there's been a lot of news stories about the Great Resignation, quiet quitting, and other pandemic and postpandemic-related phenomena. How do you see those trends potentially playing out regarding some of the progress that we've seen today, potentially both at the board level and also in the executive officer level?

DEBORAH ROSATI: Let's speak to the executive officer level first. I think with the pandemic and a lot of women were the ones that were staying home with the schooling at home, young kids at home, there was huge impact. And I think them coming back, there was a little bit of a step back.

And I think the pipeline, if we're, John, close to 20% of executive officers are women, I'm concerned that that pipeline, there might be a leaky pipeline because of this Great Resignation, quiet quitting, because I think as people have come back in-- and, as we know, there's the hybrid workplace. What is it? And a lot of women, what I'm hearing just anecdotally through conversation is more women have the responsibility of after-school care if the schools don't have it. So they're not getting face time in the office. They may be working from home.

And so I think women in particular have more of a demands on them from a work/life balance perspective. And I don't have all the data. But there was a report that came out, Women in the Workplace Report, and it was issued in October. And they said, the report found that for every woman at a director level, so a senior level position, who got promoted in 2021, two women directors left that company. So instead of increasing it, it was two steps forward, but five steps backward, right?

And so I think there's-- we don't have the data now. So, John, I think when you do go report, it'll be 2022, your next reporting off of period, it'll be really interesting to see what that impact is. So it is concerning. I think organizations and companies need to find ways to engage and keep their women in their leadership roles because if we get a leaky pipeline, it will only have an impact-- they'll have an impact on executive levels. It will also have impact at the board level.

JOHN VALLEY: And I think that's an interesting comment because in some ways it creates headwinds because when we start to look at the number of and percentage of the women on boards overall, you start to think, well, maybe that will be part of a catalyst to start seeing some more meaningful progress in the executive officer level. So it is a bit of an offset. And it will be, as you say, Deborah, I think very interesting to see what happens over the next couple of years.

COLLEEN MOOREHEAD: Yeah, in many respects the pandemic made us all amateur statisticians and keeping an eye out for leading and lagging indicators. And it strikes me that this type of data won't really bear out or this type of trend won't really bear out in the data for another couple of years. So it's certainly something that we should all, I think, keep an eye on, especially being mindful and concerned about that leaky pipeline that you flagged, Deborah.

So I'm hoping to move on to perhaps some more optimistic angles and aspects of the report. The report, John, highlights some best practices. Perhaps you can quickly outline what types of best practices the report flags. And then Deborah, would love to hear your reaction to some of those best practices. But first, John, maybe some context, if you don't mind.

JOHN VALLEY: Sure. And I think this is the part of the report, , when we talk about trying to provide a roadmap, the report does a couple of things. One is to talk about some of the best practices that issuers are disclosing. So they describe some of the diversity, equity, and inclusion initiatives they have in their organizations, what they're doing to promote the development of female employees and to move them through the pipeline that Deborah was referring to earlier. And that, to us, is important because it starts to describe to other issues what is possible, how other companies are dealing with the issue we're dealing with-- it's probably the wrong way to put it-- how they're thinking about it and the things that they're doing to try and move further along the continuum and how they think about diversity in their organizations.

The other thing we put in the report that I think is also important is some examples of disclosure from issuers that highlights really strong examples, both of whether it's talking about the value of diversity, whether it's talking about some of these best practices and strategies to increase diversity, how they're thinking about targets, reasons why they haven't adopted targets, right, which I think in some ways is some of the best-- some of the best examples we provide, are those sorts of examples, where we're trying to help companies who don't have a target or have a lower target, to explain in a more meaningful way why that is rather than just defaulting to a principles of meritocracy kind of argument. I think that's something that's really important. And increasingly a couple of examples where it's just, look, we acknowledge that we've got challenges. And we're not where we want to be in terms of diversity in our organization. And here's why.

We've got three or four examples in this year's report where issuers are pretty frank in acknowledging the challenges they face. And they talk about what they're doing to address those. And so I think those sorts of things are really important for issuers to think about if they're not where they'd like to be on in their thinking or development on diversity-related matters. So, Deborah, I'm interested in your thoughts in terms of some of the more specific practices.

DEBORAH ROSATI: Yeah, we're really fortunate. We have corporate membership with some very large organizations in Canada. And really, the premise behind it is to help advance their women leaders into the boardroom. Doesn't mean today. And so they develop programs.

I've also done customized workshops for some very large organizations, where they really want to give and empower-- they have these women networking groups and programs within their organizations. And they want to provide tools and resources to help support these women advance themselves in leadership roles. And I do have this e-guide that we recently posted out on the benefits of serving on a corporate board as an executive. So I think organizations can support their women leaders to say, as part of your evolution, as part of your leadership, getting opportunities to serve on board will only enhance your leadership skills.

So I think there's programs. I think there's mentoring within. And a lot of large organizations have those resources. And I think that only when you see-- they always say, if you see yourself or you see someone like you or you see a role model or you see that your organization is supporting you through programs, through resources, that's support. And if you don't see that, it might not be encouragement to stay. Or you might not see that path to a C-suite position.

COLLEEN MOOREHEAD: So the report at the end sets out literal excerpts from companies' disclosure as examples of best practices. So, Deborah, I mean, did any jump out at you in particular that struck you as either novel or interesting or really moving the needle?

DEBORAH ROSATI: I would say Kinaxis as an example. They're a tech company out of Ottawa. I actually know their CHRO, was really pleased to see that.

So they've got very specific hiring practices, recruitment practices, that at least one of their interviewers has to come from an underrepresented group, whether it's for the board or for hiring practices. So I think then you get that empathy. And you get looking at it right. So they're very intentional in having someone from an underrepresented group in that interview panel. I thought was a unique profile of building practices.

There's another organization, Dream Unlimited, which, John, for several years has topped having more than 50% of women board candidates. I know it's been in the running for a few years, for sure. And they have programs. They have a mentorship program within their organization to help establish leaders and mentors. They have a committee. So they have programs internally.

And then there's other organizations that have networking groups and resource groups, such as CNL, Canadian National Railway Group is one of the ones you've identified. And ATS, Automation Tooling System, they've got mentorship programs. They have resource programs.

So these are within the organizations. And they want to develop that next generation of women leaders and next generation of women corporate directors. So having those as examples, John, in your-- I love how you go through all your data. And at the end are these bright lights, examples and best practices, because you go through it. And if your question comes, well, how can I do it, then I think you've got a really great roster of companies that are doing well.

COLLEEN MOOREHEAD: All right, I think it's time now to gaze into the crystal ball and maybe predict some trends. So what are the both of you expecting to see next year? Why don't we start with you, John?

JOHN VALLEY: Sure. I mean, I think we'll have a watching brief really on, obviously, how things progress generally. But I think some of the diversity disclosure beyond gender is going to be something that we're really focused on watching. Let's see how things like targets flow through some of the executive officers so that the pull and the push of-- we've got greater representation of women on the boards.

We've got some of the headwinds potentially from the Great Resignation against an increase in the number of women executive officers, how that plays out. I think those are trends, certainly, in the data. And I think, Deborah, I mean, there's broader trends, obviously, here that are going to be worth watching as well.

DEBORAH ROSATI: Yeah, so maybe I'll go in the broader macro trends that I think. So there is really a trend to focus not just on diversity, but inclusion. And there's a great quote I want to begin with, saying that diversity is having a seat at a table. Inclusion is having a voice. And belonging is having the voice heard. So how do you make that difference?

And there was a recent Harvard Business Review article that basically said, is your board inclusive or just diverse? And they gave five top strategies of how you can make your board more inclusive. And this would, obviously, apply a lot of these principles to making your executive team and your organization. But in the case of a board, so how do you move beyond representation, i.e. you've got a number there, to make it more inclusive?

So they're saying, select a chair who's a good listener. Two, collect diversity and data, inclusion data, and learn from it. So OK, now you're collecting the data. What does it mean?

Three, engage with diverse candidates and mentees. So like, again, I use Kinaxis as an example. They were engaging in bringing underrepresented groups to make them feel included and to be part of that diversity build-out.

And also empower subcommittees. So maybe it's not a committee of the board, but it's a subcommittee or it's a subcommittee. You want to make sure that they've got diversity.

And so those are just ways to be thinking about building not only-- because the report's been very focused on diversity, which is great. But the build-out to that is inclusion. And so, again, to feel belonging in any room, in any setting, you have to be inclusive. And there is a saying, you can get asked to the dance, but you have to be asked to dance. So you can be at the table, but you have to be part of those conversations and be very included in them.

COLLEEN MOOREHEAD: I think those are some excellent suggestions and pointers for our audience and for others to consider. We'll try and post information about that article as well. Deborah, where can we find more information about your organization?

DEBORAH ROSATI: We've got lots of resources. We have events. We have virtual events. And we're a collective. And as a collective and as a community and having partners and sponsors like Oslers, we're all in it together to build a more diverse community and better governance.

COLLEEN MOOREHEAD: I am so grateful for your voice and for your sharing your story and your perspective, Deborah. So thank you very much for joining us. And really, really quickly, John, where can we find the report?

JOHN VALLEY: Sure so there's a landing page on the Osler website that I think is probably the easiest place for people to find it.