New research from The Conference Board of Canada has found that improved “comply or explain” disclosure requirements have failed to accelerate the entry of women into corporate boardrooms. (iStock)

Women remain underrepresented in Canadian boardrooms: study

Efforts by Canadian security regulators to accelerate the representation of women in corporate boardrooms have failed to produce noticeable results with only one quarter of boardroom vacancies being filled by women, according to new research from the Conference Board of Canada.

In fact, if the current pace of women being appointed to corporate boards is maintained, it will take another 17 years to achieve gender parity in Canada’s boardrooms, the research shows.

The study released by the independent research organization on Wednesday, shows that more than half (53 per cent) of the board seats that became vacant in 2018 in Canada went to men and about a quarter (23 per cent) were left unfilled or eliminated.

“That only a quarter of board seats vacated each year are being filled by women is extremely disappointing,” said Dr. Susan Black, Conference Board of Canada CEO and one of the co-authors of the report.

“If there is a silver lining to be found in the current situation, it is that every boardroom vacancy represents an opportunity.”

In December 2014, the Canadian Securities Administrators (CSA) implemented “comply or explain” disclosure requirements for women’s representation on corporate boards. These new requirements were motivated by the persistently low representation of women on boards of public companies, the report says.

The research shows the representation of women in Canada’s boardrooms among companies listed on the Toronto Stock Exchange rose from 11 per cent to 15 per cent.

While that represents some progress, authors of the report note that the pace of change mirrors the increase seen in the three years immediately prior to Canada adopting “comply or explain” disclosure requirements that ask publicly traded companies to comply with disclosure requirements or explain their non-compliance.

“In Canada, comply or explain was a well-intentioned step toward increasing the number of women on corporate boards, but it is clear that it’s not a singular solution,” saiad Rob Davis, chair of the board and the Chief Inclusion and Diversity Officer at KPMG in Canada.

“Finding and implementing solutions that work in Canada is not only in the best interest of women, but it’s good for business and the bottom-line.”

The Conference Board Research found that countries that legislated hard quotas on the representation of women in corporate boards performed better than those such as Canada that have opted for voluntary measures.

For example, countries such as Norway and France have adopted representational targets of women on corporate boards that are legally binding and failure to comply is met with financial penalties, the report said.

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