It still surprises me that there has been little change in corporate Canada to add more women to TSX listed boards.
“Either corporate Canada changes its culture, or it’ll have to justify to shareholders why it’s deliberately weakening its own bottom line.” Jennifer Stewart & Catherine Clark
Women Get On Board was recently referenced in this article from the Ottawa Citizen, which speaks to the four ways to advance more women to boards:
2-Develop a board skills matrix
4-Move the needle
It has been six 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. However, according to the recent Osler, Hoskin & Harcourt report, 2020 Diversity Disclosure Practices, just over 20% of directors serving on corporate boards in 2019 were women. This change represents only a slight increase in the average proportion of women on boards compared to prior years when the average percentage of female directors was relatively stagnant (12% in 2015, 13.7% in 2016, 16.2% in 2017, and 18.1% in 2018).
According to the same report, “The diversity discussion blossomed this year, with continued, slow growth in the advancement of women accompanied by an expanded focus into other facets of diversity. This year new disclosure requirements under the Canada Business Corporations Act (CBCA) broadened the range of corporations required to provide disclosure regarding women in leadership positions and added new requirements for disclosure regarding visible minorities, Aboriginal peoples and persons with disabilities.”
Why is it that Canada’s boardrooms are not more diverse? I often get asked to consider a board opportunity because the company is looking 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.
Become an Agent of Change
As the Founder & CEO of Women Get On Board 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 importantly, 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, read my blog post on why a diverse board makes good business sense.
So, 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 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? (Women Get On Board offers a board shortlist service to companies who are committed to advancing gender diversity in the boardroom.)
These ten questions were initially posted in my blog, “Are You Advancing Your Board Diversity Mandate?” in May 2016.
There is clear evidence that diverse boards enhance all facets of a company’s performance, so as business leaders, it is our duty 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.