How Canada stacks up on women's representation on corporate boards
Progress is slow without concrete steps like term limits on directorships, experts say
Canada's worldwide reputation for gender equality is not reflected in its corporate boards, experts say.
Data released last week by Statistics Canada showed that less than 20 per cent of board directorships in Canada were held by women in 2016 (the most recent year for which data is available), putting Canada well behind the global leaders.
Australia, Belgium, France, Norway, Sweden, Italy and Finland all average more than 30 per cent female directors, according to the 2018 Global Diversity Tracker from management consulting and executive recruitment firm Egon Zehnder, which analyzed 1,610 publicly traded companies with a market capital of about $10.5 billion Cdn or greater in 44 countries.
There is plenty of awareness about best practices for getting more women in board seats, there is just a lack of action, said Camilla Sutton, president and chief executive of Women in Capital Markets, a not-for-profit organization that aims to accelerate diversity in Canada's financial sector.
While some headway is being made, the data shows that progress is slow, Sutton said. Organizations are not taking concrete steps like having formal board evaluations, setting term and age limits, and implementing gender diversity policies.
"We have a long, long way to go before we really see not only the level of diversity across all boards that we would like to see, but also the level of diversity that we know drives real business results," Sutton said.
In 2015, the Canadian Securities Administrators (CSA) introduced disclosure requirements for the representation of women on boards and in executive officer positions.
"They said basically, OK, if you're not going to have women on your boards then you need to explain why you're not," said Deborah Rosati, founder and chief executive of Women Get on Board.
Since then, the CSA has released four reviews of the data provided by participating jurisdictions: Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan. The most recent review shows the share of board seats held by women in participating jurisdictions increased to 15 per cent in 2018 from 11 per cent in 2015.
The "comply or explain" requirement isn't nearly as forceful as some of the requirements in other countries, Rosati said.
Debating gender quotas
Many countries have set quotas regulating the minimum number of women sitting on public corporate boards, and there are two types: soft and hard quotas.
Siri Terjesen, dean's research fellow and professor at American University's Kogod School of Business, said Spain is an example of a country with a soft quota, where there are no consequences for failing to achieve a gender-balanced board. Soft quotas are more guidelines than rules, and they're not as effective, she said.
Norway enacted a hard quota in 2003 requiring publicly traded companies' boards be composed of at least 40 per cent of each gender by 2008. Corporations that did not comply could have faced various penalties ranging from paying fines to being delisted from the Oslo Stock Exchange.
Terjesen said quotas have been successful for Norway but quotas aren't always the answer.
"If the rules become too overbearing then many firms will actually seriously consider going private," she said. "A quota should really only be a last resort," she said.
Australia, for instance, has been successful at improving female representation without having a hard quota, said Pamela Warren, a partner at Egon Zehnder and an expert in chief executive succession and board recruitment.
The Australian Institute of Company Directors set a target for all boards to have 30 per cent of their directors female by 2018. By the end of December 2018, they had almost reached their goal, at 29.7 per cent. Participation in this initiative was voluntary for organizations.
Warren said Canada isn't that far behind the global diversity leaders. That's true in certain areas.
Business law firm Osler analyzed how TSX-listed companies in Canada compare in promoting women in leadership roles. Its 2018 Diversity Disclosure Practices report found that women hold 28.4 per cent of the board seats for S&P/TSX 60 companies, compared to 26 per cent of seats the year before.
Terms and age limits
Quotas and targets have had some success but they don't address the issue of access, one expert says.
Heather Shantora, chief executive of medical services companies PT Health and InnoCare Ltd., said there is a lack of seats available for women on boards.
"Perhaps board positions need to be time-limited and then they have to turn over, because in some cases there's literally not an available seat for a woman," Shantora said.
If you think of boards and the automatic picture that comes to your mind is a group of men, you may never put yourself forward.- Heather Shantora, CEO , PT Health and InnoCare Ltd.
This echoes what Sutton suggests about implementing term and age limits for board members to encourage faster turnover.
Another solution, she said, is having more visible female leaders that others can look up to.
There are many intelligent and professional women out there, but they're not necessarily going after board positions, Shantora said.
"It may be that they're not because they don't see themselves on boards," she said.
"If you think of boards and the automatic picture that comes to your mind is a group of men, you may never put yourself forward."
When she started out at her company, she said she was the only female on the management team. Now, her company is about 60 per cent female.
"One of the things I realized early on is that I had to be more vocal — like, literally louder at the boardroom table to be heard than some of my male counterparts," she said.
"But I'm thankful to be here because I made it easier for hundreds of women to work with me, to clear their path forward," she said.