Board diversity improves, but journey not over: report

Canada has seen continued progress in the representation of women on boards, with an upward trend emerging for visible minorities too. However, there has been little to no progress for Indigenous people and those with disabilities, and diversity in the C-suite continues to be a challenge, says a recent report from Toronto-based Osler, Hoskin & Harcourt LLP.

The report, 2023 Diversity Disclosure Practices, examines the leadership practices at Canadian public companies, including the representation of women, visible minorities, Indigenous people and people with disabilities at publicly traded companies governed by the Canada Business Corporations Act (CBCA), which requires separate disclosure for such designated groups.

According to the report, as of mid-2023, women held 29% of all board seats among TSX-listed companies, up from 26% in mid-year 2022.

Canada’s larger companies continued to lead the way, with women holding 36.2% of board seats among S&P/TSX composite index companies, and 38.2% of board seats among S&P/TSX 60 companies.

Women were added to boards at a faster rate than in any of Osler’s previous reports, with newly created or vacant director positions being filled by women 45.3% of the time, reflecting “a push by companies which had only one woman director to add more women, significantly reducing the number of one-woman boards,” the report said.

Visible minority directors accounted for 10.2% of board seats among CBCA corporations, compared to 8.3% in 2022 and 6.8% in 2021.

“This progress reflects a growing demand by investors for visible minority representation on boards, and is consistent with initiatives to increase ethnic diversity on the boards of U.K. companies and the representation of underrepresented groups under Nasdaq listing requirements,” the report said.

At the C-suite level, progress was slower for women. On average, 21% of executive officers were women, compared to 20% in 2022 and 18% in 2021, the report said.

According to recent data from the Canadian Securities Administrators (CSA), the proportion of women CEOs has remained at 5% for four years, though women comprised 27% of corporate board seats in the CSA’s data set, up from 24% last year.

The Osler report said the average number of executive officers who were visible minorities increased “significantly,” with an average of 0.88 visible minority executive officers per CBCA company, up from 0.68 mid-year 2022.

No change was made in the C-suite representation of Indigenous people and those with disabilities. The number of CBCA board positions held by these groups was 17 and 12, respectively, the report said.

Osler said it expects a continued increase in the proportion of women directors and executive officers, and representation for other groups could increase at a greater rate than expected if disclosure is mandated — the subject of a recent CSA consultation.

“The journey is not over,” the Osler report said.