Gender diversity on corporate board of directors is a policy concern in Canada as women's inequality has broad societal and economic implications. The strength and long-term success of Canadian public corporations depends on the highest quality board management. Significant research and reports show a positive correlation between increased diversity on boards and improved corporate governance and financial performance. Nonetheless, women currently only hold 12 percent of board appointments on publicly-traded companies in Canada and 45 percent of companies listed on the S&P/TSX still do not have any women on their boards. A number of factors have led to the slow progress of board diversification in corporate Canada. While Bill C-25 to amend the Canadian Business Corporations Act proposes disclosure rules consistent with the “comply or explain” rules of current provincial security regulators, gender parity policies must be better informed and carefully designed to ensure that women succeed in board appointments.
This project was designed as a pilot project in order to determine the feasibility of government legislating gender parity on corporate board of directors in Canada. Confidential discussions were conducted with 35 informed individuals from public, private and not-for-profit sectors, including mid to top-level professionals, both male and female, from various industries and backgrounds. Qualitative data analysis involved a comparison of respondents' views expressed on government involvement in creating board diversification in corporate Canada, allowing for an in-depth understanding of the current attitude in Canada. Respondents provided insight and shared their views on the current state of affairs as well as policy initiatives including “comply or explain,” quotas, and/or private measures. Key themes from the literature review served to guide the data analysis process. Several explanatory factors have been found to contribute to the continuous low representation of women on corporate board of directors in Canada, specifically around women's life choices, mentorship and sponsorship opportunities, and multiple elements involved in the recruitment process for new board members. Findings propose that the underlying issues impacting female representation on corporate boards are complex and a strong desire to maintain the status quo hinders progress.
The explanatory factors identified in this project strongly contribute to the low number of women on corporate boards. Policies involving targets or quotas will not succeed if the organizational culture and “pipeline” questions are not addressed. With organizational policies to address the number of women in leadership roles combined with stricter disclosure requirements to encourage companies to diversify and highlight progress to investors, the status quo can be altered. Moreover, a government-sponsored commission of established industry professionals should be established to coordinate with industry and drive change. Any policy approach designed to increase the number of female board directors should involve a partnership between the public and private sector.