By: Janis Sarra
Best practice suggests that the majority of directors on any
given board should be independent and committed to giving
sufficient time to the board, in order to ensure effective
monitoring and oversight. Yet a board can have all of these traits
and still not be maximizing value, if the corporation is paying for
costly litigation to defend discrimination complaints, has lower
productivity due to problems of systemic discrimination, or is
facing a loss of consumer goodwill because of a reputation for
gender and/or race discrimination.
Canadian publicly traded corporations, for the most part, have
human rights policies and pro-active programs to redress both overt
and systemic discrimination, and Canada has not experienced the
same level of egregious behavior in respect of sex and race
discrimination exhibited by some U.S. corporations. Yet race and
gender discrimination continue to persist. There continue to be
serious problems encountered by women and persons of color in their
advancement in corporations, particularly at the highest managerial
and directorship levels. Discrimination often operates
subconsciously or with little transparency, even where human rights
programs are in place, creating an even greater challenge for
effective governance. This Article considers how corporate
boards and their current representation and practice perpetuate
these problems through their own lack of diversity. It suggests
that the issues touch not only on gender and race, but also on
class, in the manner in which board selection and practice occurs
in the Canadian corporate environment.