Patricia VircTSX-listed companies must disclose number of female executives

January 2, 2020by Patricia Virc

In an effort to increase the number of women on boards and in other high-ranking positions, as of Jan. 1 Ontario public companies listed on the Toronto Stock Exchange (TSX) will now have to disclose the number of women on their boards of directors and in executive officer positions, CTV News reports.

Toronto civil litigator Patricia Virc tells rather than implementing quotas, the new guideline takes a “comply or explain” approach to gender diversity.

The “comply or explain” requirement, Virc says, is a corporate governance disclosure requirement of various provincial securities regulators, including the Ontario Securities Commission (OSC), and will be imposed on issuers who are listed on the TSX.

“There is no mandatory requirement to have women on your board, but what has become mandatory is disclosing how many women you have on your board. If you don’t have any, you have to say why,” she says.

Virc, a lawyer with Steinberg Title Hope & Israel LLP, says that those public companies that claim there are no meritorious female candidates will have to explain themselves or risk being delisted.

“It is like all of the other best practice guidelines that the regulators put out there,” she explains. “Their filing will not be accepted by the regulator if they do not include that information. It’s just not an option. If they want to be a public company raising money and having their stock trading in secondary markets in Ontario, they’ve got to do this.”

According to data from Catalyst Canada, women made up less than 15 per cent of directors in 2013. Virc notes that this number has increased to about 17 per cent in 2014.

She says women have greater representation in sectors like the arts, entertainment and recreation. However, women are also making gains in traditionally male sectors as well.

“One area where women are making headway is finance and insurance. Those sectors are leading the way in terms of representation of women on boards,” says Virc, whose practice focuses on corporate governance, investor disputes, oppression and other shareholder remedies.

“The areas in which Canadian companies are lacking in representation are mining, oil and gas, and manufacturing. Those industries are very much still a man’s world,” she says.

“It seems to me that those industries that are resistant to having women on boards are probably skewing the statistics downward by just rejecting the notion altogether,” Virc says. “Traditionally, the rationale behind exclusion of women is that there are no meritorious female candidates. I would imagine the real problem is that they’re looking for candidates like themselves as opposed to someone who can bring any sort of different experience or perspective.”

While statistics show women make up about half of the workforce, they aren’t necessarily holding leadership roles.

“Part of the difficulty that women have in getting board positions is that the criteria has tended to focus on experience together with senior managerial experience,” Virc says.

“For example, they like to look to the C-Suite to fill their boards, and that’s an area where women have not caught up to men.”

Virc notes that organizations like Catalyst Canada and the Canadian Board Diversity Council have compiled databases of highly qualified candidates to assist public companies in finding meritorious female candidates.

“Anybody looking for a qualified female is going to have a hard time saying they could not identify a candidate,” she says.

These initiatives are not just about gender equality, they also make good business sense, studies show.

“There have been U.S. studies of Fortune 500 companies where financial performance is linked quite strongly to companies with greater representation of women on boards,” Virc says. “The data they have suggests the improvement in financial performance is about 26 per cent.”

Patricia Virc

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