The Alberta Investment Management Corp. is emphasizing the business case for increased female participation on corporate boards.
In its response to a request for comment on the issue of gender diversity on corporate boards issued by the British Columbia Securities Commission, the organization noted that companies should already be working to promote more female participation in senior leadership. Further, it noted the lack of women in such positions isn’t the result of a shallow talent pool.
While the percentage of women on publicly listed company boards in Canada has improved, from 13.1 per cent in 2013 to more than 20 per cent in 2017, organizations should continue to actively recruit and develop women for such roles, the letter said.
“AIMCo supports disclosure of the consideration of women in nominating and recruitment processes. Issuers that include gender in their search criteria will likely be more successful in achieving a more gender diverse board,” it noted. It also stressed that furthering diversity on boards should go beyond gender.
Looking at the issue of corporate governance more broadly, the Ontario Teachers’ Pension Plan has identified executive compensation, board composition and board/stakeholder communication as its priority areas of focus for 2018.
Where appropriate, the pension fund intends to reach out to boards to examine and discuss these issues more closely, it noted in a news release. In terms of board decisions, Ontario Teachers’ intends to focus on a clearly defined policy for increasing diversity, thoughtful and purposeful selection of directors with a direct link to strategy, finding the balance between freshness and experience and independent evaluation of the recruitment and selection process.
With regard to compensation, it noted it will look at its judiciousness, direct connection to company strategy, limitations of discretionary compensation, as well as strategic capital allocation and business sustainability.
As far as communications between stakeholder and board members, the pension fund noted it will zero in on promoting environmental, social and governance management, adopting frameworks to communicate risks to stakeholders and creating a more open dialogue between stakeholders and the board in general.
These areas are “essential building blocks in ultimately creating resilient companies, enhancing performance, viability and sustainability of businesses,” said Nicole Musicco, senior managing director of public equities at Ontario Teachers’, in the release. “Over the coming year we will be reaching out to companies to discuss these important topics with the goal of learning and widely sharing our findings.”