Visible minorities lag way behind when it comes to holding corporate board seats.
In the Canadian Board Diversity Council’s (CBDC) third annual report released last week, the number of seats held by visible minorities and persons with disabilities at Canada’s 500 largest corporations is close to 4.6 per cent. In the first report card in 2010, visible minorities held 5.3 per cent of board seats based on the surveys returned by 450 corporate directors.
“Today, almost all FP 500 director respondents say diversity is important to them personally,” said the CBDC. “Unfortunately, FP (Financial Post) 500 boards are not placing the same importance on diversity as individual directors do. A growing gap can be seen between individuals who see diversity as very important and their sense of the importance their board places on diversity. The gap has grown 11 per cent in 2010 and 15 per cent in 2012.”
Conference Board of Canada vice-president with responsibility for organizational effectiveness and learning, Dr. Michael Bloom, said boards of directors in Canada continue to be significantly under-represented by visible minorities, Aboriginal people, women and persons with disabilities.
“Today’s global marketplace rewards diversity for its capacity to understand markets and to support the identification of risks and opportunities,” he said. “The challenge facing Canadian boards is to diversify faster so that they can gain the value that comes from increased representation of women, Aboriginal people, visible minorities and individuals with disabilities.”
CBDC founder, Pamela Jeffery, said differences between industries are also apparent when it comes to written diversity policies. She said that boards in the finance and insurance industry are more likely to have a written diversity policy than their counterparts in the mining, oil and gas sectors. Overall, only 18 per cent of the FP500 board members reported their board had a written diversity policy.
“It will take enlightened leadership to change the composition of Canada’s boards in our lifetimes so shareholders can benefit from directors who are the most qualified in a greatly expanded talented pool,” said Jeffery. “Now is the time for action.”
As part of its call to action, the CBDC is encouraging companies – in light of a significant number of directors returning in the next five years – to replace at least one of every three retiring directors with individuals from a diverse background.
“Diversity isn’t simply about fairness,” said Ernst & Young chief inclusiveness officer, Fiona Macfarlane. “It’s a powerful means of generating different ideas and seeing issues from a variety of different angles. Different backgrounds and experiences shape people’s perspectives in significant ways. Bringing diverse perspectives in a constructive dialogue will lead to more creative and effective problem-solving and innovation. That’s why it’s so important for leaders to actively sponsor high-potential people and help them move into positions where they can effect meaningful change.”
Next week, the council will release its Diversity 50 list, which is Canada’s first database of qualified and skilled individuals that reflect the diversity of the country’s population.