The Honourable Navdeep Bains, PC, MP
Minister of Innovation, Science and Economic Development
December 14, 2016
Check Against Delivery
Thank you, Jennifer [Reynolds, President and CEO, Women in Capital Markets], for that kind introduction.
And thank you to Stikeman Elliott for hosting us today.
This firm has an extraordinary team here in Toronto and around the world.
I want to single out one of your partners, Samantha Horn, for her extensive work in promoting the advancement of women.
I noticed that for the third year running, the Women’s Executive Network named her one of Canada’s 100 most powerful women.
That’s impressive, to say the least.
Thank you also to Women in Capital Markets for putting together this event.
Your organization has done so much to empower women in Canada’s financial services sector.
Indeed, some very high-profile women are in executive leadership positions within corporate Canada today—women such as Elyse Allan, President and CEO of GE Canada.
There’s Kathleen Taylor, Chair of the Board at RBC. She was previously president and CEO of Four Seasons Hotels and Resorts.
There’s Sandra Stuart, President and CEO of HSBC Bank Canada.
But I am here today to discuss how we can empower and promote even more women to become corporate leaders.
The latest figures show that only 13 percent of all seats on corporate boards in Canada are held by women.
Among Canada’s largest corporations, that figure goes up, but only to about 20 percent.
I’m the father of two young girls, who are six and nine.
I want them to grow up seeing far more women and other under-represented groups reaching the highest levels of corporate leadership.
Let me explain why this is so important.
Economist Harry Markowitz earned a Nobel Prize for his 1952 essay on modern portfolio theory.
Central to his theory was that the strength of an investment portfolio depended on having a diversity of assets.
To this day, asset managers rely on the Markowitz concept to provide their clients with healthy, reliable returns.
Diversity is powerful, not just in investing but also in so many other aspects of business.
More senior executives are realizing that diverse skill sets, perspectives and backgrounds are crucial to developing good ideas.
And research provides compelling evidence to support this idea.
One study has shown that corporate boards made up of members from diverse backgrounds have a 53 percent higher return on equity than those without.
Think of that. They make 53 percent more profit on the money shareholders have invested.
I’m an accountant by training so, to me, those numbers are revealing.
Another study found that firms with diverse leadership teams are 70 percent more likely to report capturing a new market each year.
And a growing body of research shows that businesses with one or more women on their corporate boards deliver higher average returns on equity and have better average growth.
Our government believes in equality of opportunity for every Canadian.
We believe in a society where everyone has a fair chance at success.
Because Canada is at its best when everyone benefits, not just a few.
At a time when other parts of the world are turning inward and questioning the value of diversity, now is the moment for Canada to set an example.
We can show the world that an open and diverse society can bring enormous prosperity that benefits everyone.
Indeed, our government places a high priority on innovation in our drive to create better jobs and opportunities for all Canadians.
We want to see every Canadian work to their full potential, regardless of gender, age, faith, background, orientation, ability and so on.
Today, the tools to start a business or create the next mobile app are almost universally available.
An Indigenous student with an Internet connection can start her own technology company.
A retiree with a smartphone can create the newest social-media platform.
A young intern with an understanding of Blockchain can come up with entirely new ways of banking.
Innovation requires creativity and fresh thinking.
And the best ideas can come from anyone, anywhere.
Simply put, the wider the talent pool, the greater the potential for innovation.
That’s why we have introduced Bill C-25.
This bill contains measures to improve diversity on corporate boards and in senior management.
It requires corporations to disclose the makeup of their boards and executive ranks.
It also requires companies to disclose their diversity policies to shareholders.
Those corporations without diversity policies would need to explain to shareholders why they don’t have any.
This bill also requires corporations to provide diversity information to the Director of Corporations Canada, Canada’s federal corporate regulator, so that progress can be monitored.
These changes are aligned with measures already adopted by most provincial securities regulators.
If passed, the bill would apply to all publicly traded firms incorporated under the Canada Business Corporations Act, regardless of which securities regulator they report to.
Two other measures in the bill will also increase diversity in corporate Canada.
One of those measures requires board members to be elected every year rather than every few years.
This measure will result in more regular turnover of board members. And it will encourage companies to recruit from a wider pool of candidates.
A second measure in the bill requires board members to be elected individually rather than as an entire slate of candidates.
An all-or-nothing approach prevents voters from meaningfully exercising their democratic rights and bringing in the board that they want.
The idea is to give more shareholders a greater say in how companies govern themselves.
Indeed, shareholders can play a constructive role in holding corporations accountable for considering a broader range of candidates and skill sets among their senior leaders.
I am proud to say that as the bill makes its way through Parliament, it has already received early support from all the major parties in the House of Commons.
Our country has an abundance of qualified candidates who reflect the diversity of this country.
The Canadian Board Diversity Council publishes an annual list of qualified candidates whom they consider ready for leadership on corporate boards.
And the Institute of Corporate Directors lists more than 3,500 women in its Directors Register.
To help companies find the right candidates for boards, the Institute offers a free referral and matching service.
Ladies and gentlemen: With Bill C-25, our government aims to develop a new generation of leaders with the skills and experience to drive economic growth through innovation.
The bill acknowledges that there is great value in diversity.
This is the Canadian story. Diversity is our strength.
That’s how we will provide better opportunities for all Canadians to participate fully in the economy.
I ask you to lend me your support in the coming months to turn this bill into law.