ICD Submits Comment to OSC on Proposed Disclosure Requirements for Women on Boards

Sep 23, 2013
The Institute of Corporate Directors (the “ICD”) today announced that it has submitted a comment letter to the Ontario Securities Commission (“OSC”) on its proposed disclosure requirements regarding women on boards.
“The ICD is an active proponent of advancing the participation of women in business and its members strongly believe greater board diversity can contribute to better corporate governance,” said ICD President and CEO, Stan Magidson. “We believe the OSC’s proposal is meaningful and worthy of pursuit, though our preference would be for the OSC to view diversity more broadly, by including considerations of business experience, functional expertise and geographic background, as well as individual qualities and attributes such as age and ethnicity.”
The ICD provided its comment letter in response to the OSC’s Staff Consultation Paper 58-401 “Disclosure Requirements Regarding Women on Boards and in Senior Management”. The letter expresses support for the general approach the OSC is taking and outlines a number of proposed amendments to strengthen the proposal. Specifically:  
  • ICD agrees with the OSC’s proposed “comply or explain” approach pursuant to which issuers would disclose their gender diversity policies and the consideration given to representation of women in the director selection process.  
  • ICD believes that measurement is important to making progress in board gender diversity, and therefore supports the concept of disclosure about diversity measurements. The ICD believes, however, that issuers have the best sense of what measurements are relevant for the purposes of advancing their own diversity policies. Therefore, the ICD recommends that initially issuers disclose their own measurable goals in meeting their diversity policies and how they are doing in comparison to those goals. 
  • The Proposal suggests that disclosure be provided about whether and how adherence to policies regarding the representation of women on the board and in senior management are assessed in connection with the annual evaluation of the board and nominating committee. ICD believes that director evaluation processes must be tailored to the specific needs of the organization, and must be permitted to take place confidentially to ensure that directors receive candid feedback. Accordingly, we do not support mandating disclosure of board evaluations.
  • While gender dominates the current dialogue on diversity in Canada and is the only category of diversity specifically addressed in the OSC’s proposal, the ICD defines diversity along broader lines. We recognize that the reference from the Government of Ontario pertained at this time only to women but would request that the OSC consider disclosure obligations that will also address diversity more generally.
The ICD does not support quotas in the boardroom or management.
In December 2011, the ICD published a report entitled Diversity in the Boardroom - Findings and Recommendations of the Institute of Corporate Directors. This report sets out why the ICD believes diversity is important to corporate governance and the ICD’s recommendations for enhancing board diversity.

Read the ICD's comment letter