The proportion of women on Canadian corporate boards took its largest leap ever in 2015 to almost 20 per cent, but Canada continues to slide behind globally as other major countries move even more quickly to embrace diversity.
A new report from the Canadian Board Diversity Council shows women now comprise 19.5 per cent of directors of Canada's 500 largest companies, up from 17.1 per cent last year. The 2.4-percentage-point increase is the largest annual growth rate for gender diversity, exceeding the 1.5-percentage-point gain between 2013 and 2014, CBDC data show.
The study also showed a large increase in the number of visible minorities on boards, climbing to 7.3 per cent of directors from just 2 per cent last year.
Despite the improvements, CBDC founder Pamela Jeffery said the pace of change in gender diversity feels "glacial" compared with some other major countries.
Canada ranked 15th among major industrialized countries for women on boards in 2014, a decline from sixth place in 2009 and ninth place in 2011, Ms. Jeffery said.
The U.S. ranked ninth and Britain was in fourth place.
Britain has no all-male boards on the FTSE 100 index and just 15 all-male boards on the FTSE 250 index, while Canada has 109 all-male boards among the FP500, Ms. Jeffery said.
The trends suggest other countries are ahead in recognizing that companies with greater diversity perform better financially, she said.
"We're not keeping up with our trading partners, whose companies have recognized they can deliver superior financial performance," Ms. Jeffery said.
Ms. Jeffrey said Britain has seen particularly rapid improvement because it introduced new regulations in 2012 requiring companies to report on their approach to gender diversity, similar to new rules that took effect in Canada this year. But she says Britain's rules have "more teeth" and Canada should toughen its standards.
Canadian publicly listed companies are simply required to disclose whether they have a written diversity policy for boards and senior management. Canadian companies are not required to have a written policy and can instead explain why they have opted not to comply with the recommendation, while British companies are required to have a policy.
Ms. Jeffrey said the distinction is critical, because written policies by definition include plans for action that lead to improvement.
"A policy has specific outcomes. In any business when you're putting in policies, you're trying to achieve an objective," she said.
The CBDC also surveyed corporate directors about diversity and their boards' actions on the issue. Ms. Jeffrey said 49 per cent of directors report that their boards have a diversity policy, yet an Ontario Securities Commission review of diversity disclosure statements found that just 14 per cent of companies reported having written diversity policies this year, a gap she found perplexing.
Ms. Jeffrey said it is possible some directors believe their boards have policies, but they are only informal and there is nothing written down.
"That's not a policy – that's hope," she said.
The CBDC survey also found that 82 per cent of directors believe their boards are diverse, even though statistics show low proportions of women, visible minorities and aboriginals on boards.
Ms. Jeffrey said it is encouraging to see more visible minority directors on boards this year, but said she wants to see whether the trend continues next year. The data come from a survey of 382 corporate directors, with 28 people or 7 per cent reporting they self-identify as visible minorities.
She said many companies that adopted diversity policies in the past two years have included other forms of diversity beyond gender, such as race and ethnicity, which could be encouraging boards to search for other diverse candidates to fill new positions.