Aug. 28, 2020
Corporate diversity targets could help dismantle systemic racism
Most Canadians would object to being labelled racist. Yet Canadian society continues to suffer from institutional racism that some rarely acknowledge.
Twenty per cent of Canadians were born elsewhere, and many of them are racialized. By 2031, racialized people could make up almost 32 per cent of the population. Yet lack of racial diversity remains a reality in the highest levels of Canadian business, namely corporate boardrooms, due to institutional racism.
There is plenty of research on the value of diversity in building community competence, the benefits of diversity within organizations as well as in professions like surgery and on the editorial boards of scientific journals.
Merriam-Webster, the authoritative dictionary, recently agreed to update its definition of racism in response to an email from Kennedy Mitchum, a young Black woman from St. Louis, Mo.
Merriam-Webster defines racism as “a belief that race is the primary determinant of human traits and capacities and that racial differences produce an inherent superiority of a particular race.” The second part of its current definition now touches on institutional racism: “A political or social system founded on racism.”
Merriam-Webster’s response suggests we’re in a notable moment of history when many of us are willing to re-examine our institutions and root out previously unrecognized deep-seated racism.
The Vatican institutionalized racism
We’ve come a long way from the racism institutionalized by the Vatican in 1493 via the Doctrine of Discovery. It stated that any lands not inhabited by Christians — the subjects of a European Christian monarch — were to be considered “empty” and available for colonization. The implication was that people around the world who were not Christians were not human or were of significantly lower status.
AP Photo/Alessandra Tarantino
That 500-year-old idea persists in today’s institutions, albeit possibly subconsciously among most corporate leaders. But it’s increasingly at odds with today’s quest for equity, diversity and inclusion.
This moment of emerging racial consciousness is important for corporations in Canada. Now is the time for corporations to examine their policies for traces of institutional racism.
Companies should implement diversity targets similar to the gender diversity targets that have slowly helped to increase the number of women on corporate boards across the country.
Commitments made but not implemented
The professional association for corporate directors in Canada is the Institute for Corporate Directors (ICD). In recent years it has grown in influence, especially through its national directors’ education and certification program.
For years boards have made policy commitments to increasing diversity as a way to address institutional racism. They have not succeeded because of how diversity was defined and how they proposed to achieve it.
The ICD defines diversity as including “but … not limited to, business experience, geography, age, gender, and ethnicity and aboriginal status.” It advises: “In particular, the board should include an appropriate number of women.”
In a 2011 study, the ICD emphasized that “while gender dominates the current dialogue on diversity, the ICD defines diversity along broader lines.”
In reality, however, the ICD failed to lead on the issue of gender diversification at the time and today does not have meaningful programs to achieve racial diversification. Worse still, its definition diminishes racial diversity by equating it to business experience, age or where a board member lives.
Achieving gender diversity on boards required targets. Between 2011 to 2015, the consensus in corporate Canada was that diversity targets were inappropriate. A membership survey found that only four per cent of ICD members supported diversity targets.
“A majority of ICD members believe the ICD should seek to raise awareness of and encourage board diversity on its merits and within the context of an overall approach to good corporate governance.”
It is unclear what ICD members were proposing as a solution and how success was going to be measured.
Resistance to change
In 2014, most of the regional securities regulators regulated by the Canadian Securities Administrators (CSA) led the initiative on achieving gender diversification on Canadian boards, starting with TSX-listed companies regulated by the Ontario Securities Comission.
By 2015, not much had changed. That year, the Globe and Mail reported that the vast majority of Canadian firms rejected diversity in response to the comply-or-explain rules requiring public companies to adopt policies to diversify their boards with women. Specifically, only 31 of 722 TSX companies had adopted a written diversity policy.
In the period that followed, organizations other than the ICD followed the OSC’s lead, namely Osler, WXN, a national network of professional women, and the Canadian Board Diversity Council. These organizations’ diversity initiatives focused on actively recruiting women on boards or measuring progress.
As of 2019, 52 per cent of S&P/TSX 60 companies have adopted a diversity policy, and indicate they use it to recruit women. Fifty-three per cent say they’ve adopted targets for women on their boards and 6.7 per cent have targets for female executive officers. Furthermore, 76 per cent of the S&P/TSX 60 companies now have women on their boards, and 39 per cent have more than one woman on the board.
This is progress over the past few years and having women on boards has been gradually normalized. Gender diversity targets have clearly worked to achieve greater gender representation on boards. Using targets to racially diversify Canadian boards would have a similar positive effect.
Targets are not quotas
The use of targets has its critics. Attempts to discredit targets is often done by negatively framing targets as quotas.
This argument is implicitly premised on the idea that racialized people are under-qualified for leadership roles, which is untrue. Furthermore although nepotism might be a reason for unqualified people of any race being appointed to positions, this has nothing to do with diversity targets.
Diversity targets are about giving opportunities to qualified diverse candidates. Intentional diversity is developing the talent pool in situations where it does not exist. Using targets to achieve gender diversity on boards worked, and similarly any meaningful solution to achieve racial diversity on boards also needs to incorporate targets.
Many Canadians are probably correct in that they are not racist, according to Merriam-Webster’s first definition of racism. Board and executive appointment decisions may well, however, be tinged by the second definition.
Just as women were unseen until recently, due to institutional sexism, as appropriate candidates for board positions, so racialized Canadians are unseen, due to institutional racism, as appropriate candidates. It’s time for a change.