It still surprises me that there has not been more progress in corporate Canada to add more women to TSX-listed boards. It has been seven years since the Ontario Securities Commission (OSC) implemented disclosure rules mandating that TSX-listed companies “comply or explain” their board diversity figures. The move was intended to lead to positive changes in how corporate boards recruit new board members.
According to the recent Osler, Hoskin & Harcourt report, 2021 Diversity Disclosure Practices, 23.4 % of board seats among TSX listed companies in 2020 have women on their boards, increasing almost 2% since 2019. This increase shows some progress but is still lagging in gender parity and the Canadian government’s 50-30 Challenge. The 50-30 Challenge acts as a framework to accelerate diversity actions in many Canadian organizations and encourage other Canadian organizations to adopt practices to improve equity.
According to the same report, “Few companies have achieved gender parity on their board. Last year there were ten companies where 50% or more of the directors were female, increasing from only five in 2019. This year witnessed a slight increase, as at 13 companies, women comprised at least 50% of the board members.” The report also found that members of visible minorities, Aboriginal peoples and persons with disabilities are underrepresented in senior leadership positions and corporate boards of public corporations – “a disappointment for a country with as diverse a population as Canada.”
In 2021, Women Get On Board Inc. (WGOB) and irlabs analyzed gender diversity on the board of directors for all new listings on the TSX from January 1, 2021, to August 15, 2021. Our results, featured in this Globe & Mail article, showed that the average female board representation among the newly listed companies is just 19 percent.
I was quite surprised to see the data. When asked to comment on the results, I told the Globe: “For companies just going public, you’d think that there would be a lot more awareness of good governance and sustainability. You have this opportunity – you’re being profiled in the public light. When you drill down, there are still companies with no women on the board.”
In this Ottawa Citizen article called “The evidence is in – we need more women in boardrooms,” Jennifer Stewart and Catherine Clark referenced WGOB’s work to promote, recruit and train women for board opportunities. In the article, Stewart and Clark wrote: “Either corporate Canada changes its culture, or it’ll have to justify to shareholders why it’s deliberately weakening its own bottom line.”
The authors also proposed four ways to advance more women to boards:
- Set targets
- Develop a board skills matrix
- Get help
- Move the needle
Why is it that Canada’s boardrooms are not more diverse? I often get asked to consider a board opportunity because the company wants to add diversity to its board. However, I have yet to see significant, meaningful movement towards board diversity across corporate Canada.
True diversity on boards requires more than tiny, incremental changes. All business leaders must step up and recognize the positive impacts of and the necessity of developing a culture of diversity in the boardroom—something that many have been slow to do.
Agents of Change
As the Founder & CEO of WGOB and as a serving independent corporate director, I believe that the OSC’s “comply or explain” disclosure rules present an opportunity to build stronger boards through tangible changes. Research supports that empowering more women to boards generates better financial performance, including a higher return on sales and better stock growth. Just as significantly, non-financial performance—such as the contribution of diverse viewpoints, skills, and experience—can improve overall decision making, enhance a company’s capacity to build a pipeline of potential future women executives and encourage innovation. For more on the benefits of diverse boards, please read my blog post on why a diverse board makes good business sense.
I want to profile women in the WGOB community who have been exemplary Agents of Change for more board diversity on boards:
- Alyssa Barry, CPIR, Co-Founder & Principal of irlabs and Caroline Sawamoto, Co-founder & Principal of irlabs
In November 2021, the Globe & Mail published an article about Planting Hope Company, the sesame milk company led by an all-female executive with an all-executive board. Planting Hope went public on the TSX-V in a $9-million deal. Alyssa Barry and Caroline Sawamoto are two of the amazing women who worked on this project. Their investor relations firm, irlabs, is dedicated to working with innovative companies to create visibility, drive investor engagement and make an impact.
- Cathy Logue, FCPA, FCA, Managing Director at Stanton Chase
Cathy Logue helps companies build exceptional executive teams and boards. Recently, Cathy worked with Proactive Group Holdings, a unique tech-enabled platform providing companies globally with a comprehensive investor engagement solution across their business lifecycle. Cathy helped Proactive recruit three new directors, including a new chair. All three of the directors are women.
- Wendy Kei, FCPA-FCA, ICD.D, Chair of the Board of Directors for Ontario Power Generation
Ontario Power Generation (OPG) recently shared this press release that 50 percent of its board members are now women after the appointment of three accomplished women with diverse backgrounds. Wendy said: “Ensuring we have a diverse board is not only the right thing to do, but will be critical as we help lead decarbonization, within the electricity sector, and in Ontario’s broader economy.”
How can you be an Agent of Change?
How can you become an agent of change by making diversity a strategic opportunity for board-building? The first step is to ask yourself these ten questions:
10 Board Diversity Mandate Questions Every Board Should Ask
- Do you perform an annual board assessment of your current board composition, and do you have a diversity of thought, skills, experience, gender, age, industry and geography?
- Have you defined what board diversity means to your company in terms of commitment and needs?
- Do you have set term limits and age limits for your current board?
- Do you have a board diversity policy that sets out targets for women’s representation on your board?
- Do you go outside your current network when looking for new board talent?
- Do you have an internal diversity champion?
- Do you perform an annual board performance evaluation for board renewal?
- Do you keep an evergreen list of diverse board candidates for board renewal?
- Do you have a board succession planning process?
- Do you ensure there are diverse board candidates in the board search process? (WGOB offers a board shortlist service to companies who are committed to advancing gender diversity in the boardroom.)
There is clear evidence that diverse boards enhance all facets of a company’s performance. As business leaders, our duty is to all step up today and collectively be agents of change in advancing board diversity in Canada. Together, we can make a difference by promoting diversity as a strategic opportunity for board-building.