It still surprises me that there has been little change in Corporate Canada in terms of adding more women to TSX listed boards.
It has been four years since the Ontario Securities Commission (OSC) implemented disclosure rules mandating that TSX-listed companies “comply or explain” as relates to their board diversity figures. The implementation was intended to lead to positive changes in how corporate boards recruit new board members, however, according to the recent Osler, Hoskin & Harcourt report 2018 Diversity Disclosure Practices, only 16.4% of directors sitting on corporate boards in 2018 were women. This change represents a slight increase in the average proportion of women on the board compared to prior years when the average percentage of female directors was relatively stagnant (12% in 2015, 13% in 2016 and 14.5% in 2017).
So why is it that Canada’s boardrooms are not more diverse, when in fact, I often get asked to consider a board opportunity because the company is looking to add diversity to its board? I truly believe that creating a diverse board requires business leaders to step up to recognize the positive impacts of and the necessity of developing a culture of diversity in the boardroom, which many have been slow to do.
Become an Agent of Change
As the Founder & CEO of Women Get On Board, and as a serving independent corporate director, I believe that the OSC’s “comply or explain” disclosure rules present an opportunity to build stronger boards through change. There is research to support that empowering more women to boards generates better financial performance, including a higher return on sales and better stock growth. Just as well, non-financial performance, like the contribution of diverse viewpoints, skills and experience, can improve overall decision making, enhance a company’s capacity to build a pipeline of potential future women executives and encourage innovation. You can read my blog post on why a diverse board makes good business sense here.
So, how can you be an Agent of Change in making board diversity a strategic opportunity for board-building? The first step is to ask yourself these ten questions to help advance your board diversity mandate:
10 Board Diversity Mandate Questions
- Do you perform an annual board assessment of your current board composition, and do you have a diversity of thought, skills, experience, gender, age, industry and geographic?
- Have you defined what board diversity means to your company in terms of the commitment and needs?
- Do you have set term limits and age limits for your current board?
- Do you have a board diversity policy that sets out targets for women representation on your board?
- Do you go outside your current network when looking for new board talent?
- Do you have an internal diversity champion?
- Do you perform an annual board performance evaluation for board renewal?
- Do you keep an evergreen list of diverse board candidates for board renewal?
- Do you have a board succession planning process?
- Do you ensure there are diverse board candidates in the board search process? (Women Get On Board offers a board shortlist service to companies who are committed to advancing gender diversity in the boardroom. )
These ten questions were originally posted in my blog “Are You Advancing Your Board Diversity Mandate?” in May 2016.
There is clear evidence that diverse boards enhance all facets of a company’s performance, so as business leaders, it is our duty to all step up today and collectively be Agents of Change in advancing board diversity in Canada. Together, we can make a difference in promoting diversity as a strategic opportunity for board-building.