The majority of directors from Canada’s 500 largest organizations (82%) say they have diverse boards, according to the Canadian Board Diversity Council’s annual report card.
But this is unlikely, says the CBDC, because the pace at which corporate diversity is improving is too slow. In fact, the report card reveals women currently hold 19.5% of FP500 organization board seats. That’s up from 17.1% in 2014, but Canada is still behind when it comes to bringing women on board. In the UK, for example, there are no all-male FTSE100 boards, while there are 109 such boards in Canada.
“The pace of change for board diversity is encouraging, but there’s more work that needs to be done,” says CBDC founder Pamela Jeffery. If each organization on the FP500 replaced one retiring male director with one female director, says CBDC, Canada would be among the leading countries for gender board diversity—at 30% female representation.
Effect of pressure from OSC
According to the CBDC’s report card, the OSC’s corporate diversity disclosure requirements are making a difference. When surveyed, almost half (49%) of directors indicated their boards have written diversity policies, up from 25% last year.
However, this data contradicts findings from OSC, adds CBDC. In a recent report, the regulator found that only “14% [of boards] clearly disclosed the adoption of a written policy, whereas 65% disclosed that they had decided not to adopt a written policy.”
“The findings of this year’s Annual Report Card show board disclosure requirements on diversity are having a positive impact,” says Michael Bloom, vice president of Industry and Business Strategy for The Conference Board of Canada. “However, achieving the goal of truly diverse boards with representation from women, Aboriginal peoples, visible minorities and people with disabilities will require much more of a leadership focus.”
- Since 2014, there has been a significant increase in the number of directors who self-report to be a visible minority, nearly tripling to 7.3% from 2% last year.
- The number of Aboriginal board members rose from 0.8% in 2014 to 1.3% in 2015.
- Nearly all FP500 corporate board respondents (96%) say board diversity is very important or somewhat important, and that’s a substantial increase from 85% in 2010.
- In the the Utilities and Finance sector, representation of women stands at 27.1%. Meanwhile, women are represented at 27% in the Insurance sector.
- In the Mining/Oil/Gas sector, representation of women lags behind at 12.2%. Same goes for the Construction sector at 9.3%.
- Despite the higher-than-average rates of female directors on TSX60 boards (22.6%, up from 20.1% in 2014), there are only 20 visible minority directors, two Aboriginal directors and one person with a disability among the 31 organizations that completed the 2015 TSX60 survey. Read: 15% of TSX issuers have added women to boards
Looking beyond board representation
Despite efforts to achieve workplace equality, nearly three quarters of working Canadian women (71%) are in roles below the management level. And, they cite the main barrier to promotion is employers’ fear of them being absent due to family obligations (47%).
Further, the study indicates that only 5% of women are employed in fields such as science, technology, engineering and math—these areas, referred to as STEM fields, are considered important to Canada’s economy.
Read: Diversity adds value: EY
“Organizations that promote and support women perform better in an array of areas, including financially, but we’re still seeing a large gap between men and women in leadership positions, particularly in those important STEM fields,” says Faith Tull, senior vice president of human resources for Randstad Canada.