Why Your Board Needs a Diversity Policy
Since the Amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices (N1 58-101), which came into effect on December 31, 2014, Canadian reporting companies, other than investment funds and TSX Venture companies, are required to disclose information regarding the representation of women on boards and in executive officer positions. Regarding board gender diversity specifically, your board will need to disclose the following:
- The number and percentage of women on your board;
- Targets for increasing the representation of women on your board, and report annually on the progress in achieving them. If your board does not have targets, you must explain why.
- Whether your board has a written policy as to how it considers the representation of women in the director identification and selection process, and demonstrate how your board measures the implementation, effectiveness, and progress of same, or explain the absence of such policies and processes.
As a result, your board will need to take the appropriate steps to change its composition, develop a board diversity policy, engage in more inclusive practices and appoint more female directors.
For those boards who do not yet have a gender diversity policy – use the sample below as a guide to help your board in developing an appropriate policy that will have meaningful impact in improving the representation of female directors.
Sample – Board Gender Diversity Policy
Purpose
The Board Gender Diversity Policy (“BGDP”) sets out our approach to gender diversity on the Board of Directors of Company Name. The BGDP applies to the Board of Directors only, and does not apply to employees of Company Name, who are governed by separate diversity policies.
Policy Statement
The board of Directors of Company Name recognizes that having a board composed of men and women with the relevant blend of differing skills, experience, perspectives, age and characteristics – leads to a more robust understanding of opportunities, issues and risks; stronger decision-making; and are better equipped to provide oversight and governance.
We are committed to improving the gender representation of our board, and commit to working diligently to implement concrete actions to effect change. The board will:
- Set measurable objectives to achieve better gender diversity with the ultimate goal of having a composition where each gender represents at least forty percent (40%).
- Ensure that the governance & nominating committee is composed of both genders, with the ultimate goal of having each gender represent at least forty percent (40%).
- Provide education and training to all board members to better understand how unconscious bias, double standards and impression-based hiring practices impedes a ‘truly’ merit-based process.
- Ensure the board’s composition considers the balance of skills, experience, perspectives and characteristics in alignment with the strategic needs of the business and the environment in which it operates. In doing so, the board will consider all measurable objectives for improving gender diversity and make recommendations to the board.
- When recruiting new directors, the board will search beyond the networks of existing board members, and commit to using outside help until such times as the diversity objectives are achieved.
- If the board maintains an ongoing list of potential candidates; such a list will be composed equally of both genders. Whenever the list is not gender balanced, for each cycle of director recruitment, the board will not rely on the list and will search beyond the list.
- If using a search firm, the nominating committee will direct the search consultant to deliver a gender-balanced slate of ‘equally qualified’ potential candidates. If for any reason, the search firm indicates that it cannot find appropriately ‘qualified’ female candidates, the board will request that the firm produce a detailed written report as to why it couldn’t and the exact process the search firm engaged in to find such candidates.
Statement of Measurable Objectives
At the date of adoption of the BGDP, the board’s objective is to aggressively and strategically improve its gender diversity over a three to four -year period in order to achieve its self-imposed targets, which are:
- To be comprised of a minimum of 20% female directors by the end of 2018;
- To be comprised of a minimum of 30 per cent by the end of 2019;
- To be comprised of a minimum of 40 per cent by the end of 2020 and forward.
Monitoring and Reporting
The Board will report annually, in the corporate governance section of Company Name Annual Report, a summary of the current BGDP, the measurable objectives set for implementing such BGDP, and the progress made towards achieving those objectives. The report will also include details of the recruitment process this board engaged in order to improve the representation of women on its board.
Board Gender Diversity Policy Review
The Governance and Nominating Committee will review the BGDP annually including an assessment of its effectiveness, and will discuss any revisions that may be required and recommend any such revisions to the board for approval.
Board Gender Diversity Policy Governance
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Name of Company
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Date policy was approved |
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Print Name
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Print Name |
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Signature |
Signature |
About Lansdowne Board Intelligence
At Lansdowne Board Intelligence, our experts know that when both competence and diversity are considered paramount to an objective, rigorous and merit-based board recruitment process – it leads to the best directors being selected.
Gillian Lansdowne can be reached at: