Parity and Diversity on Boards of Directors 

Abstract

Diversity and inclusion notions have come to the forefront in recent years, and the issues of board representation have extended well beyond gender. Pressures on boards to display diversity are multiple. Some classes of institutional investors are outspoken in this regard, using their shareholder clout to demand change. It is primarily on the premise that diversity avoids the risk of a decision-making process that is vitiated by too much homogeneity and complacency, that diversity is considered an essential feature of board composition. The selection of new directors is predicated on the evaluation of multivariate criteria, and each nomination must be thought through by weighing its effects on the various dimensions of the board’s diversity, without neglecting the usual considerations.
This paper first examines diversity disclosure statistics by Canadian companies following changes to Canadian law in this regard. Then, it considers various aspects of the concept of “diversity” through the lens of of many disciplines, such as psychology, anthropology, sociology, pedagogy, and management, in order to better identify the relevant dimensions of the concept within a corporate governance framework. To conclude, a working group makes recommendations on diversity with the hope of making a useful contribution to the debate on this issue.

Keywords: diversity, board composition, parity, board renewal, mandatory disclosure, corporate governance, board of directors