Women’s representation on public company boards in Canada has stagnated at only 10 per cent despite years of advocacy and publicity, spurring a new campaign that urges boards to set a goal to improve gender diversity within five years.
Research and advocacy group Catalyst Inc. will mark International Women’s Day on Thursday with the release of a new survey showing that there has been almost no improvement in recent years for women on the boards of Canada’s 500 largest companies, which includes publicly traded and private companies, as well as Crown corporations.
In those 500 companies, women comprise 14.5 per cent of corporate directors, up only marginally from 14 per cent in the last study two years ago.
Boards of publicly traded companies – representing most of Canada’s biggest firms – have only 10.3 per cent female directors, a tally unchanged from the previous study. Even worse, the new Catalyst survey found that 46.2 per cent of publicly traded companies have no women on their boards, a number that has weakened from 44.9 per cent two years ago.
“The news in this census is particularly disappointing because the pace of change is so slow,” said Deborah Gillis, Catalyst’s senior vice-president of global operations.
Around the world, companies are facing pressure to improve their gender diversity in executive ranks and on their boards. A number of European countries have introduced mandatory quotas for female directors, while others are requiring companies to report on their strategies to improve board diversity.
The report's standings also highlight a missed opportunity for companies to improve profits.
More balanced companies have a 56 per cent higher operating profit than male-dominated companies, a recent McKinsey study showed. And earnings at companies with at least one woman on the board are “significantly higher” than among those with none, an Ernst & Young analysis found.
Earlier this week, the European Commission said it is studying the introduction of mandatory quotas for women on European boards because change remains “stubbornly slow.”
While Liberal Senator Céline Hervieux-Payette has introduced a private member’s bill in the Senate that calls for similar quotas in Canada, the Conservative majority government has not supported the proposal.
Ms. Gillis said Catalyst hopes to encourage progress by creating a new program that asks Canadian companies to have 25 per cent female directors by 2017.
The project has won support from high-profile companies such as Royal Bank of Canada, which has agreed to set internal goals for women on their boards.
Toronto-based Catalyst will list participating firms on its website, but the companies are not required to publicly disclose their diversity targets and Catalyst will keep them confidential.
RBC chief executive officer Gordon Nixon, a member of Catalyst’s Canadian advisory board, said the key is to create a target, which then spurs an effort to achieve it. “I’m a great believer in the fact that if you don’t have voluntary targets that you measure, then often very little happens,” he said.
RBC has five women on its 16-member board, so it has already surpassed Catalyst’s 25-per-cent target level. Some could say it is an easy pledge to make under the circumstances, Mr. Nixon said, but RBC has spent more than 20 years working on diversity issues to get to that level. The bank says 40 per cent of its executives are women – up from zero in the late 1980s.
“It does take time, but you can certainly achieve these results if you put your mind to it,” Mr. Nixon said.
Beatrix Dart, executive director of the Initiative for Women in Business program at the University of Toronto, said she is concerned that there will be little accountability for firms that make a confidential pledge to increase women on their boards without disclosing the target publicly. But she said it is encouraging to see Catalyst tackling the issue.
Ms. Dart believes a key way to make progress would be to get an agreement from search firms that specialize in finding directors for boards, in which they would commit to putting equal numbers of female candidates on lists they present to clients. “Think about the power and the influence executive search firms have,” she added.
Ms. Gillis said Catalyst plans to work with search firms to develop a voluntary code of conduct for recruiting more women to boards. She said business leaders on Catalyst’s advisory committee have also drafted a list of senior women they will personally sponsor for directorships.
While Catalyst is aiming for an overall average of 25 per cent female board membership by 2017, Ms. Gillis said companies can set whatever target is realistic, based on their starting point.
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