Turning up the heat

In 2016 women should not still be battling to be named to boards of directors. After all, research from Catalyst, a non-profit organization that advocates for women in the workplace, shows naming women to boards is profitable. It found companies with three or more women directors in at least four of five years significantly outperformed those with sustained low representation by an astonishing 84 per cent on return on sales, 60 per cent on return on invested capital, and 46 per cent on return on equity.

That alone should be reason enough to name more women to boards of directors. But it hasn’t been. Nor has a voluntary push adopted by the Ontario government in December 2014 called the “comply or explain” regulation. It required companies listed on the TSX to report publicly on the number of women on their boards and to explain, if there weren’t any, why not.

But by last September the results of that nudge had proved beyond disappointing. Only 49 per cent of companies had even one woman on their board. Further, only 15 per cent had added one or more women to their boards in 2015, despite “comply or explain.” Worse, only 14 per cent of 722 reporting companies had a formal plan in place for promoting women to their boards and a dismal 7 per cent had set specific targets.

Now Premier Kathleen Wynne has smartly adopted new gender diversity targets for boards of directors, recommended in a report from Catalyst, that have a chance of meeting with more success. That’s because they come with a threatened bite: If the targets are not met, the government will consider regulations or legislation to make it happen, as many European Union countries already have.

That’s more like it. With the threat of compulsion in the background, the voluntary targets are likely to meet with more success. That has been the experience in Britain. It also chose to go the voluntary route but threatened legislated targets, such as those passed in Norway, if the goals weren’t met. Significant progress has been made, the Catalyst report notes.

The targets Wynne announced this week are more than sensible and achievable. They are the right thing to do in a world where women in business still face discrimination.

First, they would require that women make up at least 40 per of all appointments to provincial agencies, boards, commissions and Crown corporations by the end of 2019.

Second, they would ask companies with at least one woman director to set a target by 2017 of appointing women to 30 per cent of positions on their boards, and to reach this goal within three to five years. For those that currently don’t have any female directors, the target would be to name one.

One! Surely that is possible in a country where more women graduate from university than men. It’s time Ontario’s boards of directors reflected gender diversity. Companies should make sure they meet the targets or prepare to face the consequences.