Insights from the DEI Panel Discussion at Design Exchange: Shaping the Future of Canada's Capital Markets

A refreshing panel conversation on diversity, equality and inclusion in Canada's capital markets took place at the Design Exchange (formerly Toronto Stock Exchange) this morning in Toronto.

The Ontario Securities Commission assembled the panel to discuss the Canadian Securities Administrators' (CSA) proposed amendments to Corporate Governance Guidelines.

Comment period on these guidelines are open until September 29th, 2023.

As an attentive audience member, I identified seven key themes that I'd like to share:

1. Importance of Transparency:

   • There's a demand for more transparency, particularly concerning boards.

   • Investors rely heavily on accurate reporting to make informed decisions, but the current approach is often not detailed enough.

   • There's a growing emphasis on companies being transparent about their DEI (Diversity, Equality and Inclusion) practices to remain competitive, especially with international disclosure requirements in play.

2. The Business Implication of DEI:

   • It's not just about associating diversity with returns; the broader conversation indicates concerns around increased controversies, litigation, and challenges in talent acquisition and retention.

   • Also, the DEI policies and their effective implementation reflect a company's overall purpose and deeper philosophy.

3. Data & DEI:

   • The current DEI data quality is low, and there's a critical need for improvement.

   • Investors need data for effective comparisons in portfolios and to inform their own clients about a company's DEI stance.

   • Better data also helps to expose real situations, identify risks, and discover missed opportunities.

4. Role of Indigenous Peoples & Other Marginalized Groups:

   •  Extremely low representation of indigenous peoples on boards, despite the significant implications for industries operating on indigenous lands.

   • A gap in indigenous perspectives leads to a lack of understanding of the real risks and opportunities.

5. Operationalizing DEI & Building Trust:

   • Companies need to operationalize DEI policies and integrate them deeply into their practices.

   • Creating a trusting environment is vital. Employees should feel comfortable disclosing personal information without fearing misuse.

   • Efforts should be genuine, not merely a corporate obligation or a reputational boost.

6. Discussion on Forms & Standardized Disclosures:

   • A stronger preference was highlighted for Form B over Form A for its consistency, comparability, and detailed insights.

   • The Form B is seen as the minimum standard companies should adhere to.

   • Standardizing disclosures aids investors, ensuring that the data they need is easily accessible and understandable.

7. Setting Targets & Encouraging Cultural Shift:

   • The discussion touched upon setting mandated targets (not quotas) to drive improvements in DEI.

   • Emphasis on a well-articulated narrative for companies in transition, focusing on their work toward a diverse representation.