The number of women on TSX-listed issuers’ boards of directors has increased steadily from 11 per cent to 29 per cent in the last ten years. However, Canadian public companies have yet to collectively cross the widely touted target of having 30 per cent of women on boards. Considering recent data from the Canadian Securities Administrators, we look at why the glass ceiling is noticeably thicker for some women and how women can continue to increase their representation in Corporate Canada.
Summary
- CSA Multilateral Staff Notice 58-317 Review of Disclosure Regarding Women on Boards and in Executive Officer Positions (the Report) shows a positive but slowing trajectory for women on boards and in executive officer positions.
- Progress for women in board leadership and executive officer positions, traditionally male-dominated industries and members of underrepresented groups has been slow.
- Investments in supporting women, creating and fostering inclusive workplaces, and advocating for mentorship and allyship, along with the adoption of targets, diversity policies and term limits, can help increase the number of women in Canadian corporate leadership.
The Report
The Report represents the tenth consecutive and final annual review of public disclosure of women on boards and in executive officer positions as required by Form 58-101F1 Corporate Governance Disclosure of National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101). The Report summarizes the public disclosure of 574 issuers listed on the Toronto Stock Exchange (TSX) in a wide range of industries including mining, oil and gas, financial services, real estate, technology, manufacturing, retail, biotechnology and utilities. Of the issuers reviewed, 58 per cent had a market capitalization of less than $1 billion and 10% had a market capitalization of more than $10 billion.
Overall, the Report indicates there has been positive progress for the representation of women on boards but markedly slow progress for the representation of women in executive officer and C-suite positions.
Diversity disclosure going forward
In wrapping up its 10-year review, the Canadian Securities Administrators (CSA) is exploring potential changes to diversity-related disclosure requirements for issuers. In its 2022-2025 CSA Business Plan, the CSA indicated that it will focus on diversity on corporate boards and in executive positions, and enhancing the quality of disclosure provided to investors. In April 2023, the CSA also explored proposals for enhanced disclosure on aspects of diversity beyond the representation of women, while continuing to retain current disclosure requirements with respect to women (the Proposed Amendments). CSA Notice and Request for Comment – Proposed Amendments to Form 58-101F1 Corporate Governance Disclosure of NI 58-101 and Proposed Changes to National Policy 58-201 Corporate Governance Guidelines solicited comments on the Proposed Amendments with the main objective of increasing transparency about diversity on boards and in executive officer positions, including diversity beyond women, providing investors with information on how diversity ties into an issuer’s strategic decisions, and providing guidance on corporate governance practices related to board nominations, board renewal and diversity. The Proposed Amendments presented two approaches: (1) Form A, which would require an issuer to disclose its approach to diversity in respect of the board and executive officers but would not mandate disclosure in respect of any specific groups, other than women; and (2) Form B, which would require additional disclosure on historically underrepresented groups. As was set out in the Ontario Securities Commission’s draft Statement of Priorities for 2025-2026, consideration is being given to the feedback received in the 2023 consultation process “with a view to finalizing… rule making and policy amendments.”
Refining the pipeline – Areas for growth
While the results of the Report are optimistic with respect to women occupying board seats, progress in the representation of women in board leadership (i.e., board chair, vice-chair and chair of board committees) and executive officer positions, in traditionally male-dominated industries, and in other aspects of diversity is lagging.
Advancement of women to board leadership and executive officer positions
The number of women in board leadership and executive officer positions remains notably low. According to the Report, from the fifth year to the tenth year of reporting, the percentage of women chairs of the board only grew 3 per cent, the percentage of issuers with a woman CEO grew 1 per cent and the percentage of issuers with a woman CFO grew 1 per cent.
Deloitte’s article, “Women in the Boardroom, eighth edition” (the Deloitte Report) suggests this slow growth in board leadership and executive officer roles is not exclusive to the Canadian market and appears to be a global phenomenon. A commonly cited obstacle for women seeking board or executive officer roles is lack of experience which highlights the leaky pipeline. This is especially problematic given the Deloitte Report noted research on the multiplier effect, whereby, in the context of women in the financial services industry, for each woman added to the industry’s C-suite, a positive, quantifiable impact occurred on the number of women in senior management roles one level below. Initiatives to support women in board leadership roles and executive officer roles must not be overlooked when trying to increase overall board diversity.
Women bring innovation to traditionally male dominated industries
Certain industries lead the way with the number of women on boards and in executive officer positions. According to the Report, utilities, manufacturing and real estate industries had the highest percentage of issuers with one or more women on their boards, while biotechnology, mining and financial services had the lowest percentage of issuers with one or more women on their boards. Similarly, when considering women in executive officer positions, retail, utilities, manufacturing and real estate industries showed clear advancement, while mining, biotechnology, oil and gas, and technology industries lagged behind. Unsurprisingly, these sectors – biotechnology, mining, oil and gas and technology – have been traditionally considered as male-dominated industries. However, the Canadian Chamber of Commerce, in their report titled “Championing Women in Business in Canada” found that companies with more women in executive teams are more likely to outperform on profitability, value creation, customer satisfaction and employee engagement. Additionally, greater diversity can produce increased innovation, which is crucial to advancing progress in traditionally-male dominated industries.
Representation based on other aspects of diversity
While there has been an increase of representation of women at the board level, representation based on other aspects of diversity continues to be challenging. In its Diversity of Boards of Directors and Senior Management of Federal Distributing Corporations – 2023 Annual Report, Innovation, Science and Economic Development Canada identified 526 distributing corporations required to disclose diversity information and found that only 0.7 per cent of board seats were held by Indigenous people, 5 per cent by members of visible minorities and 0.5 per cent by people with disabilities. The 2024 Annual Report Card on Gender Equity and Leadership (the Annual Report Card) published by the Prosperity Project surveyed some of Canada’s top 500 companies by revenue, many of which are companies listed on a stock exchange, to determine women’s standing at four levels of leadership: corporate director, executive officer, senior management, and pipeline to leadership. The Annual Report Card further reports that women from underrepresented groups, including Indigenous peoples, members of the 2SLGBTQIA+ community, and members of visible minorities, continue to face unconscious bias, systemic racism, microaggressions, lack of sponsorship and higher scrutiny and expectations in the workplace. Companies should ensure that any diversity, equity and inclusion policies reflect and combat these concerns so that opportunities to advance for members of underrepresented groups are not passed up as a result of a toxic environment.
Do targets make a difference?
Importantly, the Report noted that there was a positive correlation between the adoption of certain diversity measures and board seats held by women. Issuers who had adopted targets for the representation of women had more women on their boards (35 per cent women where a target was adopted vs. 22 per cent women where no target). However, only 44 per cent of issuers had adopted such targets. Similarly, issuers with written policies with respect to women on their board had more board seats filled by women (33 per cent women where a written policy was adopted vs. 20 per cent where no written policy was adopted). Unlike with respect to target, the majority of issuers reviewed had adopted a written policy (64 per cent). Finally, term limits were also seen to be a helpful mechanism for increasing the representation of women on boards, but only one quarter of issuers reviewed had adopted a term limit.
What’s next?
To support sustained progress of the representation of women among corporate boards and beyond, companies should consider investing in resources to support and develop women leaders, creating inclusive corporate cultures by considering workplace policies from a female lens, and advocating for mentorship and allyship for women and for members of underrepresented groups earlier in their careers. The adoption of term limits, targets and policies with respect to the representation of women and other members of diverse groups can also assist in increasing representation in corporate leadership.
BLG’s homegrown initiative Driven by Women™ is committed to working with BLG’s clients and partners to increase the number of women leaders in our communities. BLG and Driven by Women™ connect and champion women in their journeys towards professional success and leadership opportunities.
If you are looking for ways to support and improve gender diversity in the leadership of your organization, BLG’s subject matter experts are here to help. BLG lawyers are at the forefront of new developments in corporate governance and our multidisciplinary teams work with clients to identify potential issues and create results. Reach out to the authors or any of the key contacts below to learn more about the changing corporate governance landscape and how it may affect your business.
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