Recent Reports on Diversity, Equity, and Inclusion on Boards of Directors

by Luis R. Chacin

This article is provided by Carters as part of their May 2021 Charity & NFP Law Update. The original article is located here.

In February 2021, Statistics Canada released the results of a crowdsourcing survey conducted between December 4, 2020 and January 18, 2021 on the diversity of charity and non-profit boards of directors (the “NFP Survey”). The NFP Survey found that women make up almost 60% of the board members in the not-for-profit sector, 11% identified as members of a visible minority group, 8% identified as LGBTQ2+ individuals, 6% identified as persons with a disability, and 3% identified as First Nations, Métis or Inuit. The NFP Survey also found that while over 30% of participants said organizations have a written policy to promote diversity in their board of directors, 47% said their organization did not have such a policy and the remaining 23% did not know.

More recently, on April 7, 2021, Corporations Canada released its first report on the representation of women, visible minorities, Indigenous peoples and persons with disabilities on the boards of directors and senior management roles of publicly traded companies (the “Report”). Amendments to the Canada Business Corporations Act in 2018 introduced a new requirement for publicly traded companies to disclose to Corporations Canada information on the diversity on their boards and senior management teams. The Report states that 17% of all board seats are held by women, 4% by members of visible minorities, 0.3% by persons with disabilities and 0.3% by Indigenous peoples. With regard to senior management positions, women hold 25%, visible minorities hold 9%, persons with disabilities hold 0.6% and Indigenous peoples hold 0.2%. The Report concludes that these results are “in contrast to the diversity of the Canadian population available to work.”

The differences between the Report and the NFP Survey may be due to the different methodologies and sampling. However, it is important to note that there is increased interest in more diverse perspectives in decision making and ensuring that the boards of directors of not-for-profits reflect the diverse communities they serve.

The Canadian Charter of Rights and Freedoms (the “Charter”) specifically permits positive discrimination and states that the equality rights of every individual “does not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.” However, the Charter only applies to state action, not to the conduct of private persons. Private persons, including individuals and corporations, are generally subject to provincial human rights legislation. In Ontario, for example, the Human Rights Code provides that every person has a right to equal treatment with respect to services, accommodation, and employment, without discrimination based on prohibited grounds such as race, creed, gender identity, or disability.

However, there is much more beyond the framework of our legal system that provides legitimacy to our social order, and conversations on diversity, equity, and inclusion are more about legitimacy and fairness and less about legal requirements. In particular, when people talk about diversity, equity and inclusion they are referring to how perception and human error in the process of hiring and promoting often leads us to unconsciously give preference to candidates who look or sound like us from among otherwise similarly competent candidates.

Like other statistical reports, the NFP Survey and the Report must be reviewed in the context of their specific methodology and sampling. As well, the reports are not prescriptive and do not state what the minimum representation of designated groups should be. Instead, the reports provide only a snapshot of data gathered that may be used as a reference point when considering written policies on diversity, equity and inclusion for the boards and senior management of charities and not-for-profits.