From Hollywood to Canada: Inclusion Riders and the End of Canada’s Employee Diversity Problem

By Justin D'Onofrio

Last week, during the 90th Annual Academy Awards Ceremony, the recipient of the Best Actress Oscar for Three Billboards Outside Ebbing Missouri, Frances McDormand ended her acceptance speech with “I have two words to say to you tonight: Inclusion Rider”. Her ending statement garnered a smattering of applause, leaving the audience both at the ceremony and at home confused, so much so that Merriam Webster dictionary tweeted that “Inclusion Rider” became the most popular search of the night.

What is an Inclusion Rider?

An Inclusion Rider is a clause in an actor’s contract that allows them to demand that the film’s cast and crew meets a certain threshold of diversity that reflects society (i.e. 50/50 gender diversity). Like any clause in a contract, if it is not respected, damages can be sought - most likely a fine. The term was first popularized in a TED Talk in 2016 by Stacy Smith, the founder of the Annenberg Inclusion Initiative at the University of Southern California and its main goal is to combat the unconscious bias of the auditioning and casting process in Hollywood.

Inclusion Riders in the Workforce

The sudden popularization of the term raises the following question: ‘why can’t there be inclusion riders in business contracts?’. If the entertainment industry can mandate a workforce that resembles the world around it, there is no reason that that same principle can’t be adopted across all industries. It is no secret that gender and racial bias is very prevalent in the business world. While initiatives have been made to reduce the gender pay and promotion gap, the progress has been achingly slow. According to the Board Diversity Council, only 30 percent of board memberships in Canada’s 500 largest companies are held by women, and at this current growth rate, true gender parity won’t be reached until 2094. The statistics are worse when looking at visible minorities, who represent merely 4% of board membership. In other words, the Canadian business environment continues to remain straight, white, and mostly male.

In order to sincerely consider the adoption of “inclusion riders” in business, the only players with enough power to make an impact would be investors, including pension funds, investment funds, venture capital firms and even banks. If these institutions were to be more mindful of the diversity and inclusion policies of the companies in which they invest, a certain level of diversification could be ensured, as investors would essentially require specific levels of diversity within an organization in order to guarantee financing.

There are venture capital firms and investments houses that already specialize in green or ethical finance, so there’s no reason that others cannot insist on a certain level of diversity from the companies they work with. This would create a powerful incentive to change. Specifically, in Canada, there are in fact investment firms that focus on businesses run by people of colour, members of the LGBT community or women, however, true change will only occur if this becomes the rule instead of the exception. This movement will amplify the conversation of employment equity and would also call upon more companies to be transparent with their hiring processes and potential biases.

Political Pressures

There has also been political pressure put on businesses to maintain levels of inclusion in their organizations such as the Employer Equity Act. The legislation did pass through, however, it is mainly reserved for federal agencies and the businesses with whom they partner. Issues with proper employee auditing have also emerged, as well as ensuring that the employees in executive positions are also well diversified.

As with any form of societal change, in order for a shift to happen, the participation of the society’s most privileged is needed. Although legacy banks and powerful investment firms have that power, change will only come when the pressure for change comes from several different directions and stakeholders. This does not only include investors but employees, customers and the government too. If all levels of society propel forward for social change, a palpital difference can be made, resulting in every Canadian having equal opportunities in the workplace.