No progress for women or minorities at executive board level, diversity disclosure report finds

Canadian businesses have reported a slow, steady increase in the number of women on boards, but there has been a disappointing lack of progress for women and visible minority groups at the executive officer level.

The sixth annual Diversity Disclosure Practices report by Osler Hoskin & Harcourt LLP has been enhanced to reflect new disclosure requirements under the Canada Business Corporations Act which became effective in January. The amendments broadened the range of corporations required to provide disclosure regarding women in leadership positions and added new requirements for disclosure regarding visible minorities, Aboriginal peoples, and persons with disabilities.

“As a result of amendments to the CBCA effective at the start of this year, for the first time we had a data set that covers diversity characteristics beyond gender,” says John Valley, a corporate governance partner at Osler and a co-author of the report. “Unfortunately, based on the companies that provided disclosure we saw some very low numbers across all the designated groups other than women, both in terms of the representation of those groups in the board room and in executive officer positions.  We also saw that very few disclosing companies had established targets for the representation of members of these designated groups as directors or executive officers.”

Based on disclosure provided by 217 CBCA corporations, only 5.5 per cent of directors are visible minorities. Among the 2,023 board positions of the 270 CBCA companies that provided full or partial disclosure of their practices before July 31, only seven positions were held by Aboriginal peoples, while persons with disabilities held just six positions. Of 230 CBCA companies providing disclosure, almost none disclosed having targets for designated groups, other than women.

Osler’s report found that women hold 21.5 per cent of all board seats among TSX-listed companies that disclosed the number of women directors on boards – an increase of almost three per cent, compared to 2019. Almost half of the 586 companies which had disclosed data by July 31 indicated that they have more than one woman on their board – an increase of approximately nine per cent compared to the same period last year.

Despite this slow, steady progress for women, the rate at which females are being appointed to fill newly created or vacated board seats declined slightly to 35 per cent, compared to 36.4% in 2019. The proportion of women executive officers has remained largely unchanged since 2015, and only 9.8 percent of TSX-listed companies have targets for women executive officers.

“I think this is due, in part, to the relatively small number of positions available in most corporations, and the relatively infrequent turnover,” says Valley. “There are organizations that provide strong disclosure about programs that they have in place to develop talent and provide opportunities for women, in particular. They describe how they are expanding the pipeline for female executive officers in the future.”

The report was compiled by Osler's corporate governance practice group and involved an extensive review and analysis of diversity disclosure by CBCA companies and all TSX-listed companies required to comply with the diversity disclosure requirements under applicable securities laws through to July 31, 2020.