New ICD study underscores the benefits of increased diversity on corporate boards in Canada

Dec 05, 2011
 

Canadian corporate directors agree board diversity is an important and worthwhile initiative that can contribute to better decision making and governance, according to the Institute of Corporate Directors (ICD) study on board diversity, released today.

The position paper, “Diversity in the Boardroom: Findings and Recommendations of the Institute of Corporate Directors,” is based on a multi-faceted board diversity initiative undertaken by the ICD that involved a series of town hall discussions in Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, Toronto, Ottawa and Halifax, and a survey of 550 ICD members to provide a quantitative foundation to the work.

Of those surveyed, 90% agree that board diversity is a governance issue of importance and nearly 80% believe that board diversity contributes to better decision making. A clear consensus also emerged on how not to approach board diversity. An overwhelming majority of town hall and survey participants were strongly opposed to government-imposed quotas or legislated mandates. Only 4% were in favour of such measures.

“The ICD believes greater board diversity can contribute to better governance,” said Stan Magidson, L.L.M., ICD.D, and President and CEO of the Institute of Corporate Directors. “The key is for boards to make diversity a priority and approach it within the context of their particular skills matrix and board composition. The ICD has put forward six recommendations that we hope will become the focus of board discussions over the coming year.”

The ICD urges all Canadian boards to consider its recommendations and commit themselves to working actively to foster greater board diversity by:

  • Considering diversity as an important part of the criteria that are used to determine board composition. Diversity for these purposes should be broadly defined to include gender, ethnicity, age, business experience, functional expertise, personal skills, stakeholder perspectives and geographic background;

  • Adopting formal diversity policies that outline the essential criteria and experiential attributes that fulfill the needs of the board;
  • Directing search firms, where used, to include diverse candidates in searches whenever possible (and subject to satisfying the qualifications of the position);

 

  • Encouraging search firms to include qualified candidates who are unknown to current board members;
  • Facilitating diversity agendas that permeate all levels of an organization, starting at the top with the Board, CEO and senior management ranks; and

  • Considering limits on the tenure of board members to encourage ongoing board renewal, being mindful of the need for a healthy degree of board continuity and experience.

About the Study
Diversity in the Boardroom: Findings and Recommendations of the Institute of Corporate Directors was conducted to gain the benefit of the ICD’s members’ perspectives and experiences to determine the importance of this issue, and to inform the ICD’s thinking on what Canadian corporate directors and boards should be doing in relation to board diversity in Canada. 

Download the report

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