Missing Link: Gender Diversity on Canadian Boards

A release of 2016 data by StatsCan has revealed that, despite Canada’s reputation as a champion of gender equality, the country is still steps behind when it comes to gender diversity in the boardroom.

The data was sourced from the Corporations Return Act and found that less than one out of five corporate board seats were occupied by women. To be exact, that’s 19.4% of board seats in Canada, while 80.6% of board seats were occupied by men.

More than half of the boards reviewed in the Act did not have a single female board member. While that leaves under half of the boards categorized as having contained female board members, 28% percent of those boards held one female. The remaining 15.2% contained “more than one” female board member. This may account for the discrepancy at a wider glance. There were no boards recorded with solely female membership.

Fast-forward to 2018 when Egon Zehnder published their annual Global Diversity Tracker. The publication revealed that Canada and the United States had a combined average of approximately 22.7% of female board members. Although it’s an increase shared between the two countries, the progress appears slow and still falls much shorter than their global counterparts.

The publication ranks Canada behind countries such as Italy, Sweden, Germany, Australia, France, and Finland, which have largely surpassed Canadian boards in their average number of female board directors, some with a membership as high as 30% and 42% (France).

With a range of differing board membership rates, it’s no wonder the awareness of the issue is slim globally. The idea that boards are lacking qualified females is shared by 36% of female participants and only 7% of male participants of a 2016 Global Board of Directors survey by SpencerStuart.

One phenomenon that may account for the distance between perceptions of the issue by males and females is the prevailing cultural norms in the collective psyche, which the Egon Zehnder Global Diversity Tracker publication argues is the reason for the challenges that boards are now facing with gender diversity, along with the stubborn and lasting nature of the issue.

While a stubborn social consciousness may have yet to shift, the Egon Zehnder Global Diversity Tracker’s studies also show that gender diversity on boards increases better corporate results.  

A study by the European Corporate Governance Institute (an international non-profit organization) in 2016 also found evidence that corporate boards with a higher female director percentage from 1997 to 2011 (they studied 1,691 firms) resulted in bigger dividend payouts.

They point out that Canada is one of the many countries without a board quota. Although a quota seems like a promising solution, it is important to consider the implications, which may deem such a strategy unconstitutional, as has been determined in other countries.

To address the problem, the Organization for Economic Co-operation and Development (OECD) recommends precise objectives be outlined in a federal strategy, as stated in their 2018 Gender Equality in Canada review.

As we await updated results on the issue of board gender diversity, know this: our perception of gender equality in Canada as a whole may not reflect the true standard set by organizations and Canadian boards today. Canada may be able to learn from countries with a higher average of female directorships in their policies and practices. Perhaps the stark difference in gender board membership will inspire a change in how organizations approach hiring practices for their boards. Clearly the proven value of such widespread membership rates is yet to be felt in Canada.

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Written by
Danielle Orr

Danielle is a multi-media journalist and private investigator specializing in open source intelligence research. She is the host of Truth Be Told podcast which centres around issues relating to indigenous communities in Canada.

She holds an Honours Bachelor's degree in Criminology and Socio-Legal Studies, and is currently obtaining a post-graduate certificate in New Media Journalism from Sheridan College.

You can find more of Danielle's work here: http://danielleorr.mystrikingly.com/

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