Written by Denise Bright, Kristopher Hanc, William Osler and Siobhan Quinton
In March 2021, the Canadian Securities Administrators (CSA) published the sixth Staff Review of Disclosure Regarding Women on Boards and in Executive Officer Positions. Recently, participating securities regulatory authorities (Manitoba, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan) published the underlying data used to prepare the review. The data summarizes results from the review of public disclosure documents filed on SEDAR of 610 reporting issuers.
The CSA includes securities regulators from the 10 provinces and 3 territories, and is responsible for developing a consistent approach to securities regulation across Canada. The CSA Staff Review of Disclosure Regarding Women on Boards and in Executive Officer Positions has been published every year since 2015.
Although there are certain exceptions, issuers listed on the Toronto Stock Exchange and some non-venture issuers are annually required to provide disclosure on the number of women in director or executive roles, targets, board policy, board renewal and consideration of the representation of women.
The purpose of the review of disclosure regarding women on boards is to increase transparency for investors and stakeholders regarding the representation of women on boards and in executive officer positions. As of May 2020, 1,600 issuers were listed on the TSX, 730 of which were subject to disclosure requirements.
The data in the Review indicates there have been some positive trends regarding the number of women on boards and in executive officer positions. The total number of board seats occupied by women in 2020 has increased 9 percent since 2015. Over half of issuers adopted a policy relating to representation of women on their board, and 79 percent of issuers had at least one woman on their board.
1. Women on Boards
The Review reports that 20 percent of board seats are held by women, which is up from 11 percent reported in 2015. The data indicates issuers with a higher market cap tend to have more women on their boards. Companies with a market cap of less than $1 billion disclosed that 15 percent of board spots were occupied by women. For companies with a $10-billion market cap, the percentage of seats occupied by women in year 6 was 31 percent. The total number of women on boards has been steadily increasing in all capitalization categories considered in the report. Although the total number of women on boards increased, only six percent of women were board chairs. Approximately 30 percent of vacant board seats are being filled with women, a decrease of 3 percent over last year's review. There has also been a small increase over the years in the adoption of term limits for directors.
2. Women in Executive Officer Roles
Of the 610 issuers included in the Review, 476 disclosed executive officer information. The number of issuers with women executive officers ranges broadly from 0 to 86. Of the Review sample, 65 percent of issuers had at least one woman in an executive officer position which is consistent with prior years. CEO and CFO disclosure is not a requirement, however issuers who did disclose this information reported that 5 percent had a woman CEO and 15 percent had a woman CFO which is consistent with prior reported years. Very few (4 percent) issuers have adopted targets for women in executive officer positions.
The Review also considered the number of women on boards and executive officer positions based on industry.
Manufacturing, real estate and retail has the highest percentage of issuers with one or more women on their boards. Biotechnology, mining and oil and gas issuers had the lowest. In fact, biotechnology has decreased by 6 percent since 2015. The Canadian banks, which have typically been early adopters of diversity initiatives, are not captured in the 2020 review. However, the information provided by the banks' own public disclosures showed that on average women account for 39 percent of the boards of the 6 largest Canadian banks.
The technology industry appears to have made the most strides. In 2020, 84 percent of technology issuers reported they had at least one woman on their board, compared to 39 percent in 2015. Utilities have stayed the most consistent with 86 percent representation in 2015 and 87 percent in 2020.
The real estate industry, retail and utilities disclosed the highest percentage of issuers with one or more women in executive officer positions. Mining, oil and gas and technology recorded the lowest percentage.
The data indicates that setting targets for the number or percentage of women on boards may lead to a higher percentage of women on boards. Issuers with board targets had on average 26 percent of their board seats held by women, and those without targets had an average of 17 percent. Similarly, issuers that adopted policies regarding the representation of women on their boards had an average of 23 percent of women on their board while issuers with no policy had on average 15 percent.