The number of visible minority directors on corporate boards in Canada is getting smaller, a surprising trend that comes even as more boards add women to improve their gender diversity.
A study by the Canadian Board Diversity Council shows visible minorities comprise 3.4 per cent of directors on the boards of Canada's 500 largest companies, marking a steady decline from 5.3 per cent in 2010 and 4.6 per cent in 2012.
Boards also reported having 2.1 per cent directors with disabilities, down from 2.9 per cent in 2010, but said the proportion of aboriginal directors has risen modestly to 1.3 per cent from 0.8 per cent in 2010.
The decline in diversity comes as boards have faced particularly broad pressure to bolster the number of women in their ranks. The lobbying has borne modest fruit, however, with boards now having 15.6 per cent female directors, up from 14.4 per cent last year. The survey includes a wide array of companies including Crown corporations, private companies, co-operatives and public companies whose shares trade on a stock exchange.
Board Diversity Council founder Pamela Jeffery said she was surprised by the drop in visible minorities in an era of heightened concern about diversity, but said she believes it is related to the fact that more than 90 per cent of directors surveyed say they "always" or "sometimes" look for new board members from their own personal networks, and those networks are not diverse.
"I think this shows a very disturbing picture of the fact that the powerful in this country currently do not include visible minorities in any significant way," Ms. Jeffery said in an interview Monday. "I think it's the harsh reality in this country where we have such a rich visible minority population, but they are outsiders."
The diversity council said the decline in ethnic diversity comes as visible minorities grow to more than 16 per cent of Canada's overall population, and more than 40 per cent of the population in the largest urban centres of Toronto and Vancouver.
The report included a survey of directors from the 500 largest companies, with 93 per cent saying the issue of board diversity is important and 76 reporting they believe their board is diverse. Yet the council said the "overwhelming support for greater board diversity is not translating into action," blaming a lack of will by boards to hire diverse directors.
"Directors aren't getting what diversity means," Ms. Jeffrey said, noting many see diversity as having different career backgrounds or coming from different cities, rather than gender or ethnicity.
The report also shows wide differences in diversity on boards depending on industry sector. Boards in arts and entertainment, for example, have more than 25 per cent women, while finance and insurance, utilities, accommodation and food services and retail have over 20 per cent female directors. However, there are fewer than 10 per cent women directors in sectors such as construction, mining, oil and gas, wholesale trade and forestry.
The Board Diversity Council is aiming to see the overall proportion of board seats held by women rise to 20 per cent by 2015 and 30 per cent by 2018.
Based on the current rate of growth of women on boards since 2001, however, the council forecasts it will take until 2097 to reach gender parity on Canada's boards.