Disclosure rule does little to diversify boardrooms

Women remain underrepresented in boardrooms of Canadian companies listed on the Toronto Stock Exchange despite the introduction of disclosure requirements intended to boost their numbers, a study by an Ottawa think tank has found.

The Conference Board of Canada said that while there is some progress in the proportion of women on corporate boards, the pace of change remains slow.

“More needs to be done if we’re going to achieve that goal of parity earlier,” said Susan Black, Conference Board CEO and lead author of the study, in an interview.

In 2015, the Ontario Securities Commission and other Canadian regulators implemented a so-called comply-or-explain rule, which requires most publicly traded companies to disclose the number of women in key positions or explain why they have not met their goals.

Women only made up 15 per cent of Canadian boards in 2018 — an increase of just four percentage points from 2015, when seven provinces and two territories introduced the disclosure requirements, the study

found. “(The) improved ‘comply or explain’ disclosure requirements have failed to accelerate the entry of women into corporate boardrooms,” the Conference Board report reads.

Black said the numbers demonstrate that requiring organizations to publicly state what they’re doing is not sufficient to change behaviours and speed up progress toward gender parity in boardrooms.

The study found more than half of the board seats that became vacant in 2018 went to men and about a quarter were left unfilled or eliminated.

If men and women were added to boards on a 50:50 ratio, boardrooms would reach parity in five years, said Black.

“The good news is women still filled a quarter of the board seats; the bad news is women only fill a quarter of the board seats,” she said.