Canada’s largest public companies have added more women to their boards in the past two years as they face growing public pressure to bolster their diversity, including proposed new regulatory guidelines.
New research by women’s advocacy group Catalyst shows women comprised 12.1 per cent of directors on boards of publicly traded Canadian companies in 2013, up from 10.3 per cent in 2011. The proportion of public companies with no female directors fell sharply to 41.7 per cent from 46.2 per cent in 2011.
Catalyst has done a similar review of boards every two years since 1998, but has never seen a faster rate of growth for women in a two-year period, said Alex Johnston, executive director of Catalyst Canada. Women now account for 15.9 per cent of board directors at Canada’s 500 largest companies, including private companies, Crown corporations and public companies, up from 14.5 per cent in 2011.
Past surveys have typically shown a growth rate of about 0.5 percentage points for women on boards, Ms. Johnston said, so the current increase of 1.5 percentage points is an encouraging rate of improvement. She said the numbers are starting to reflect the impact of greater discussion and activity that seems to be emerging around board diversity.
“It’s a real shift,” she said. “I think it’s starting to show the activity we’ve been seeing for a year or a year and a half now.… It’s starting to get picked up in the numbers.”
The increase has been driven in large part by improvements at publicly traded companies. While they continue to have a lower proportion of women than private companies or Crown corporations, they account for much of the improvement in the latest tally.
The increase to 12.1 per cent women comes after the proportion of women on publicly traded company boards went unchanged between 2009 and 2011.
Ms. Johnston said it is especially encouraging to see a drop in the number of companies with no women on their boards, many of which are in traditionally male-dominated sectors such as mining and energy.
“It suggests it is probably becoming increasingly unsustainable to say, ‘I can’t find any qualified women for my board,’” she said. “Five years ago, people may have nodded in understanding. Now they say, ‘You can’t find one woman out of 10 or 12 directors?’”
By industry sector, public administration (which includes many Crown corporations) saw the largest percentage of female directors in 2013 at 34 per cent, followed by arts and entertainment companies (26 per cent) and utilities (23 per cent). Mining and oil and gas extraction had the lowest proportion of female directors at 7 per cent.
The Ontario Securities Commission has proposed new guidelines that would require companies to disclose their approach to board diversity or explain why they have opted not to comply. The anticipated “comply or explain” rules, which are still out for public comment, might have spurred some companies to add women to their boards, Ms. Johnston said, but most of the gain in the 2013 numbers would have come even before the OSC initiative was announced.
Ms. Johnston said the changes reflect several years of public pressure from corporate leaders and female board members who have advocated for more board diversity. “For a long time you didn’t have enough of a critical mass of people and they didn’t have enough of a platform for those messages to penetrate, and now they do,” she said. “There’s a lot of room for more progress, but I’m optimistic.”
One area of concern, however, is private companies, which include Canadian subsidiaries of U.S. multinational companies. They saw the proportion of female directors drop slightly to 18.6 per cent in 2013 from 19 per cent in 2011. Ms. Johnston said the decline is small, but the direction is troubling.
Co-operatives and Crown corporations showed a growing proportion of women directors, but Ms. Johnston said the findings may not be statistically significant given the small number of firms included in the samples and the changes to the composition of the group.
While co-operatives, for example, had 25.2 per cent female directors in 2013, up from 20.5 per cent in 2011, Ms. Johnston said there are only 10 co-ops included in the survey so it is difficult to say there is a clear trend with such a small number of total directors.
The 40 Crown corporations in the survey reported an increase in female directors to 30.4 per cent from 26.8 per cent in 2011, but Ms. Johnston noted that the numbers reflect a change in a small number of directors and it is hard to draw a clear conclusion. The same category showed a drop for women between 2009 and 2011, she said, and it was unlikely that was a significant trend either.