Wednesday, May 29, 2013

The Four Horsemen of Affirmative Action Ride Again

Here in Ontario we have a new premier for our provincial government. She is the first openly lesbian politician to hold such a high office. That in itself is noteworthy even praiseworthy but she also, while a Liberal, is on the left-wing of that party. What is starting to show up is a stridently feminist political agenda.

Yesterday we heard that her government will be creating new 'rules' for publicly-traded companies to set targets for the number of women in senior roles. The corporate world apparently is an arena where Canada lags in what is called 'gender diversity'. We are told Ontario is considering a 'comply or explain' approach. Businesses are to be required to either disclose a diversity policy, including goals, and provide a public annual assessment of progress, or explain why they have set no goals. This has the features of what used to get called affirmative action.

We have an Ontario Minister for Women's Issues. But not one for men, kids, non-whites, or pets and farm animals. And she's told us she's alarmed by the fact that the proportion of women on Canadian corporate boards of directors is stuck around 10%, and more women are in this role in other countries. But the flaw here is that she is not comparing apples to apples, since in Commonwealth nations other than Canada all heads of key corporate functions are titled 'director' and so many more employees sit on boards, while in Continental Europe the concept and role of company director differs from Anglo-American governance practice, with a very small Supervisory Board being the norm.

I sat on many corporate boards over a 25 year period; mostly but not exclusively these were highly entrepreneurial firms using advanced technology. The sort of companies governments love to support. Some were publicly traded. I cannot recall one instance of us thinking about sex or origins in our decisions about from whom we took our counsel or added to our ranks. There just weren't enough willing and qualified people around for that sort of prejudice to have any traction.

This doctrinaire initiative by a minority government needing to court the political Left ignores the largely dismal history of forcing race and gender diversity and additional disclosure requirements into business hiring and decisions. As in Quebec where successive separatist governments keep lowering the barrier on the company size at which all employees are forced to work in the French language, public companies in Ontario can make choices about relocating their offices if harassed by unreasonable and diversionary legalities. It's inevitable that the Law of unintended consequences will come into effect if this one is put into place by our securities trading authority.

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