Women wanted: The Star’s view,

Companies have known for more than a decade now that adding women to their boards of directors substantially improves financial performance.

But even that doesn’t seem to be enough to budge most companies. According to Catalyst Canada, a women’s advocacy group that studies board performance, only 20.8 per cent of board seats at Canada’s FP500 companies were occupied by women in 2014.

That needs to change. But, discouragingly, a new study indicates it’s not getting any better.

The results in a report from the Canadian Securities Administrators are dismal. Despite a push from a new program to get more women on boards and into executive positions, only 49 per cent of companies have even one woman on their board while only 60 per cent have at least one woman among their executive officers. Further, only 15 per cent of companies had added one or more women to their boards in 2015.

That’s discouraging, considering that so much hope was placed on the new program created by Toronto Stock Exchange regulators to encourage companies to voluntarily increase the proportion of women on their boards and in their executive offices.

The program, which took effect Dec. 31, is called “Comply or Explain.” Listed companies were required to disclose how many women they have on their boards and in executive roles. And it was recommended they adopt plans to improve their gender diversity.

The disheartening results: Only 14 per cent of the 722 reporting companies now have a formal plan in place for promoting women to their boards, and only 7 per cent had set specific targets.

Why? Most companies without a plan said targets were ineffective or arbitrary and they preferred to promote based on merit.

Yet as obvious as doing that may sound, it defies research that shows companies with more diverse boards perform better.

For example, Catalyst found that companies with three or more women directors in at least four of five years significantly outperformed those with sustained low representation by an astonishing 84 per cent on return on sales, 60 per cent on return on invested capital and 46 per cent on return on equity.

Oil, gas and technology companies had the worst results. Their excuse for not having more women on their boards? That there are fewer females than males in fields such as engineering. But experts say those boards could benefit from drawing on people with expertise in the social and environmental issues they face.

The comply-or-explain approach was adopted to speed up the process of advancing women without taking the controversial step of setting quotas, as some European countries have done.

If results from the voluntary program continue to be so disappointing, the pressure to adopt quotas will only increase.