The Canadian Securities Administrators (CSA) recently published the 10th-year report titled “Review of Disclosure Regarding Women on Boards and in Executive Officer Positions” (the Report), which provides insights into the progress of gender diversity in corporate leadership among Canadian public companies. The Report’s key findings reflect incremental advances and highlight areas for further improvement.

Overview and purpose

The CSA conducted the study to observe the impact of mandatory disclosure on gender diversity in corporate leadership. Specifically, the Report assesses compliance with National Instrument 58-101 – Disclosure of Corporate Governance Practices, which mandates certain disclosures on gender diversity for issuers on the Toronto Stock Exchange (TSX). The aim is to provide transparency for investors and encourage diversity in corporate leadership positions.

Key findings at a glance

1. Board representation:

• Women held 29% of all board seats among surveyed issuers, marking a notable rise from 11% in the Report’s first year.
• However, only 8% of board chairs were women, revealing limited female representation in top board positions.
• 37% of board vacancies were filled by women, showing some progress in increasing female board presence when seats are vacated.

2. Executive officer positions:

• Women comprised 16% of Chief Financial Officers (CFOs) and 5% of Chief Executive Officers (CEOs).
• 72% of issuers had at least one female executive officer, but only 7% had explicit targets for female representation at the executive level.

3. Policies and targets:

• 64% of issuers have policies to support gender diversity on boards and 44% have set specific targets for female board representation.
• The presence of formal policies and targets correlates positively with higher female representation on boards, emphasizing the impact of deliberate diversity measures.

4.  Board renewal and term limits:

• About 25% of issuers adopted director term limits, while 40% implemented other mechanisms for board renewal. Notably, issuers with term limits or renewal mechanisms had higher female representation on their boards (35% on average).

Trends and industry variations

The Report shows that diversity practices and female representation vary significantly by industry:

• High female board representation: The utilities, manufacturing and real estate sectors saw the highest percentages of women on boards.
• Low female board representation: Sectors like biotechnology, mining and financial services had comparatively lower female board participation.
• Similarly, the percentage of women in executive roles was highest in retail, utilities and real estate sectors, while mining, oil & gas and technology lagged behind.

Observations on policy impact

• Issuers with explicit gender diversity policies and targets averaged 35% female representation on boards compared to 22% among issuers without such measures.
• There is a clear trend that organizations implementing structured diversity strategies, including board renewal mechanisms, saw more substantial progress in gender diversity.

Implications and future steps

With this Report marking the tenth and potentially final annual review, the CSA is exploring updates to disclosure requirements to create a more harmonized, national framework for gender diversity reporting. This Report serves as both a benchmark and a call to action for continued development in gender diversity within Canadian corporate leadership.

The Report's findings emphasize that diversity goals, structured policies and board renewal strategies are essential in progressing toward equitable representation, which aligns with evolving investor expectations and corporate governance best practices.

For further information or assistance with the Report, please contact author Diana Nakka or any other member of our Securities and Corporate Finance group.