Canadian issuers are making progress at improving gender diversity at the highest levels, but there’s more work to be done, according to a Canadian Securities Administrators (CSA) staff notice published on Wednesday.
The CSA’s notice — which sets out the results of regulators’ latest review of issuers’ disclosure about the representation of women on their boards and in executive roles, along with their corporate governance policies in this area — found that the representation of women on boards is creeping up.
Overall, 55% of firms now have at least one woman on their board, up by six percentage points from last year. Furthermore, 10% now have three or more women on their boards, up from 8% last year. Large issuers are leading the way, the CSA’s notice says, with 18% of board positions at issuers with a market capitalization of at least $1 billion now held by women. This is up from 16% last year.
“Our findings indicate an improvement in the number of women on the boards of non-venture issuers across all size categories of issuers, although there remain important variations by industry,” the CSA says in its notice.
However, the CSA’s review also found that the percentage of issuers that have at least one woman in an executive officer position remained relatively stable, year-over-year. Furthermore, it reports that the total percentage of board seats occupied by women is just 12% vs 11% a year ago. The regulators also note that they found that a number of issuers are not fully complying with the disclosure requirements.
Ontario Securities Commission (OSC) chairwoman and CEO, Maureen Jensen, called on companies to do better in a speech to the Toronto Region Board of Trade on Tuesday. Of the 521 board seats that were vacated during the past year, only 15% went to women, Jensen noted: “Without an improvement in the vacancy fill rate, we will never reach 30% female board representation.”
The CSA notes that its review found that issuers that have a policy on the representation of women on their boards have higher female board representation on average.
Specifically, firms with a policy in this area have boards that are 18% female whereas issuers with no policy report that just 10% of their directors are women. Furthermore, the rate is even higher for issuers that have set diversity targets, which have an average of 25% female board representation.
In addition, the CSA found that the prevalence of these policies and targets are on the rise as 21% of issuers now have a policy on finding and nominating women directors, up from 15% last year, while 9% of issuers now have targets on board representation, up from 7% last year.
Moreover, 58% of issuers say they consider the representation of women when making executive officer appointments, up from 53% last year.
“These disclosure requirements were adopted to increase transparency and to provide meaningful additional information that investors can consider when making investment and voting decisions. This year’s results show that the requirements have generally led to improved disclosure by issuers and are having a positive impact on the representation of women on boards,” says Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers, in a statement. “This topic continues to be a CSA priority and we will continue to evaluate and report thereon to ensure meaningful disclosure is provided.”
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