(Toronto) Boards of directors of Canadian companies should have at least 40% women and 30% members of racially underrepresented groups or who identify as Indigenous or people with disabilities, recommends a new report.
The suggestion comes from the operator of the Toronto Stock Exchange, TMX Group, and the Institute of Corporate Directors, a non-profit organization offering leadership and governance advice.
According to the report, boards should also assess the performance of directors and the board as a whole at least once a year and director terms should be limited to a maximum of 12 years, except in rare cases where an extension represents the primary interest of the company.
These suggestions go further than current policies, including a requirement for TSX-listed companies to either disclose, or explain why they cannot, their progress in attracting more women to their boards. .
According to a report by Osler, Hoskin & Harcourt, women held 23.4% of board seats of TSX-listed companies that disclosed their number of female directors in 2021, an increase of less than 2% compared to 2020.
Of the 318 companies that provided data on other underrepresented groups, 77% had at least one visible minority director, 7% had Indigenous directors, and 8% had directors with disabilities.