Motion No. 3: Charitable Boards Need to Reflect the Diverse Communities They Serve | Senator Donna Dasko
On May 3, 2022 Senator Dasko spoke in support of Senator Omidvar’s motion that the Senate call upon the government to implement the eighth recommendation of the first report of the Special Senate Committee on the Charitable Sector. Watch her speech:
Hon. Donna Dasko: Honourable senators, I rise today to speak to Motion No. 3 on our Order Paper, introduced by and spoken to by our colleague Senator Omidvar, concerning the governance of charitable organizations — another wonderful initiative from our colleague. The motion moves that the Senate call upon the government to implement one of the recommendations from the Special Senate Committee on the Charitable Sector. That recommendation proposes that charitable and not-for-profit organizations be asked to include information about the diversity of their boards when they provide their annual information to the Canada Revenue Agency about their organizations.
This diversity would be measured using the four categories used in employment equity legislation: women, Indigenous peoples, persons with disabilities and members of visible minorities.
The suggestion was one of the recommendations of the Special Senate Committee on the Charitable Sector, whose report, Catalyst for Change: A Roadmap to a Stronger Charitable Sector, was adopted here in the Senate on November 3, 2020.
That committee was chaired by Senator Terry Mercer, and its deputy chair was Senator Omidvar. The report of that committee is filled with superb analysis and recommendations to modernize and improve our charitable organizations, and I highly recommend that report.
If this particular motion were implemented, all charitable and not-for-profit organizations would record the diversity of their board members on the annual forms which these organizations are required to submit to Canada Revenue Agency each year, along with the other required information about the operation of their organizations.
The charitable sector is a vital part of the Canadian economy and Canadian society. With approximately 86,000 registered charities and 85,000 non-profit organizations, economic activity in the sector totalled around $170 billion in 2017, representing 8.5% of Canada’s GDP, according to Statistics Canada. The sector employs almost 2.5 million people. The organizations in the sector range in size from very large to extremely small.
As well, the charitable and non-profit sectors provide services across almost all areas of Canadian life. Think of health care, education, the arts, sports and recreation, the environment, social supports, criminal justice and so many more.
The charitable sector also has a special relationship to disadvantaged communities in this country. In fact, the sector provides vital services to these communities by helping people and groups through policies and programs directly aimed at disadvantaged persons and those in need. It is perceived as much more people-friendly and people-oriented than the corporate world, for example.
The charitable and non-profit sectors are run by boards of governance — also called directors — who may be elected or appointed. Boards represent the highest level of leadership in each organization.
The directors set the priorities and policies of the organization and hire the executives to run them. I would guess that most honourable senators have served on such boards and understand very well the responsibilities that are involved.
Given the connection between the charitable sector and diverse and disadvantaged communities, it’s important that the leadership of the sector reflect that diversity.
Now, most charitable organizations also have to raise money. This is important to mention, because the need to raise funds and recognize donors has an outsize influence on board membership, at least historically speaking. This may be a potential point of tension against the need to reflect the diverse communities that charities serve when it comes to representation on boards and other leadership positions.
Now, in my experience and observation, the topic of diversity comes up quite often in my conversations with the board members and executives that I know, and this is a good sign. But it’s hard to assess what progress has actually been made. Indeed, the very few existing studies available show that there, in fact, is a real deficit in representation.
One major study conducted by researchers at what was then known as Ryerson University, titled Diversity Leads, looked at board members in five sectors in eight cities across the country in 2017. Women made up about 43% of the voluntary, university and college boards, while visible minorities made up 12% and 15% respectively. In the hospital sector, women made up about 40% of board members, and visible minorities made up 15%. And I won’t even begin to mention the dreadful numbers the study found for the corporate sector, which is not our topic here today. Still, the numbers for the non-corporate sectors that I just noted indicate under-representation when compared to the percentage of women and visible minorities in the population overall.
There are very few other data sources for us to examine to understand diversity in the governance of charitable and non-profit organizations. And that is precisely what this motion is focused on: collecting systematic data to look at the sector’s governing structures — its boards — through a diversity lens such that we can better understand the parameters of the challenge ahead.
Before concluding, I want to comment briefly on two important pieces of legislation that include diversity measures for the purpose of comparing and contrasting them with the motion that we have.
Those two pieces of legislation are the Employment Equity Act and what was known as Bill C-25, An Act to amend the Canada Business Corporations Act.
Under the Employment Equity Act passed in 1995, federally regulated industries, Crown corporations, other federal organizations and portions of the federal public service are required to collect information annually on the representation of the four groups in their workforce and to report on the steps they have taken to achieve full representation of these groups. They must conduct a review of their employment systems, policies and practices to identify employment barriers against persons in these groups that result. They must also prepare an employment equity plan, if under-representation has been found, that establishes goals for the hiring and promotion of persons in each of the four groups, and sets out measures to be taken to meet these goals.
Bill C-25, An Act to amend the Canada Business Corporations Act requires certain corporations to report diversity among their directors and senior management positions and, in particular, the representation of the same four groups designated in the Employment Equity Act: women, Indigenous peoples, persons with disabilities and members of visible minorities. These corporations are also required to report whether they have implemented policies regarding diversity, what these policies involve and, if they don’t have these policies, why they don’t.
The motion we are considering here today involves one aspect of these two pieces of legislation. That is, the collection of data on diversity. The motion does not involve describing, articulating or implementing any policies or programs with respect to diversity. But it is a very important step in moving the dial forward on diversity in the not-for-profit and charitable sectors. What gets measured does get done.
So, colleagues, I am very pleased to support this motion. As Senator Omidvar has said, it’s very practical and very doable. And I believe it will help to promote diversity in our society. Thank you very much.
Some Hon. Senators: Hear, hear.