By Dustyn Lanz* – June 2023
A potential rule change on corporate diversity disclosures in Canada could change that.
As I write this, I lie in bed, propped up at a 45-degree angle with four strategically-placed pillows. I’m one of 2.5 million working-aged Canadians experiencing pain-related disability. I injured my back in 2020, and the pain just hasn’t gone away; at my worst, I was horizontal for about 23 hours per day.
Fortunately, I am still employed in a part-time position with ESG Global Advisors. The firm wanted my skills regardless of where I worked from, and on a schedule that worked for my circumstances.
I have the extraordinary privilege of chief executive officer experience – I was head of the Responsible Investment Association – alongside gender and racial privilege. But most of those living with disabilities do not enjoy such advantages. People living with disabilities are hugely under-represented in corporate leadership.
A potential coming rule change on corporate diversity disclosures in Canada could help change that. But only if the right path is chosen.
The Canadian Securities Administrators, an umbrella group of provincial and territorial regulators, is currently seeking comments on a proposal on two potential rules. One of them is for companies to disclose the number of women, Indigenous peoples, racialized persons, persons with disabilities and LGBTQ persons on boards and in executive officer roles. The other option would merely require companies to disclose their “approach to diversity” in leadership, but would not require disclosure of any groups other than women.
The latter approach (non-disclosure), which has some strong support among companies, simply would not provide the market with comparable information about a company’s diversity in leadership. It is not a credible path to improving diversity because it would not produce meaningful data to measure it. For the sake of transparent capital markets, people with disabilities and other under-represented groups, and not to mention the economic and business benefits of more inclusion, it is preferable that regulators adopt the disclosure-based approach.
Statistics Canada in 2018 estimated that 20 per cent of Canadians aged 25-64 are living with a disability, including 645,000 people who could be working but are not. That’s a lot of talent sitting on the sidelines, many of whom surely face barriers in a typical work environment.
It’s a shame that so many people with disabilities have difficulty obtaining work. A 2023 Bank of Canada survey shows that businesses are worried about a shortage in labour to fill the reported 855,890 job vacancies. I can’t help but wonder: How many of those vacancies would be filled by the hundreds of thousands of job-hungry Canadians with disabilities if hiring teams embraced inclusion, accessibility and flexibility?
Meanwhile, a 2022 Osler study found persons with disabilities hold 0.6 per cent of board seats and a mere 0.06 per cent of executive officer positions among 250 Canadian companies disclosing such information – far below the 20 per cent of working-aged Canadians experiencing disability. So, while most companies don’t disclose information on disability in leadership, the available data suggest people with disabilities are largely excluded from the top ranks of corporate Canada.
Relatedly, a 2021 Angus Reid survey found that 40 per cent of Canadians living with disabilities say corporations fall short on hiring them. This is a missed opportunity: Companies with inclusive and accessible hiring practices enjoy business benefits such as tapping into a larger pool of talent and expanding their customer base. For instance, 62 per cent of Canadians say they would be more likely to buy from a company that supports people with disabilities.
Furthermore, investors believe diversity and inclusion – including disability inclusion – are good for business. That’s why 54 institutional investors managing more than $2-trillion in assets signed the Canadian Investor Statement on Diversity & Inclusion, which states that “higher levels of diversity and inclusion are associated with improved corporate financial performance, driving growth, and strengthening employee engagement.” The pledge also says inclusion contributes to an improved reputation, and a stronger governance and risk profile.
While many would like to see the inclusion of people with disabilities and other under-represented groups in corporate leadership, it is hard to track this information because most companies don’t disclose it. This is all the more reason that, when Canada’s securities regulators update their relevant rules, they need to adopt the disclosure-based approach.
Dustyn Lanz is a senior adviser with ESG Global Advisors Inc. and the former chief executive officer of the Responsible Investment Association.
Image from Pixabay
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