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Canadian Securities Administrators progress report on women on boards and in executive officer positions

women on boardThe extent and impact of gender disparities on boards and in executive officer positions are well-documented. The Canadian Securities Administrators (CSA) recently released a progress report (“the Report”) on the disclosure requirements which were implemented to increase transparency around the issue. The results engender both hope and concern.

The background

On 31 December 2014, securities regulators in Ontario and nine other Canadian jurisdictions implemented amendments to disclosures under National Instrument 58-101 – Disclosure of Corporate Governance Practices (“the Rule”). The Rule now requires non-venture issuers to disclose, annually:

  1. policies relating to the identification and nomination of women directors;
  2. consideration of the representation of women in the director identification and nomination process and in executive officer appointments;
  3. director term limits or other mechanisms of board renewal;
  4. targets for women on boards and in executive officer positions and
  5. the number and percentage of women on the issuer’s board and in executive officer positions.

Issuers must consider the representation of women and adopt the above mechanisms, policies and targets, or, explain the reasons for not doing so (i.e. “adopt or explain” or “comply or explain”). The Report concludes that companies need more guidance on the level and detail of disclosure necessary, and does provide some guidance, via sample disclosures.

The results

In some ways the Report engenders hope:

  • It is fair to expect that with time and additional guidance, issuers will achieve and disclose increasingly positive results. The Report only covers disclosures from the 722 issuers who made disclosures by 31 July 2015, for year-ends between 31 December 2014 and 31 March 2015. Additionally, focusing on gender equality now increases the odds of future success. It will take time to balance all the relevant factors, implement changes and then realise positive results. 
  • Although it is unclear how much of any statistic or improvement is directly attributable to the amendments: (i) 15 percent of issuers added one or more women to their boards in the reporting year; (ii) 48 percent of issuers with written policies on identifying and nominating women directors adopted or updated those policies within the year; (iii) 49 percent of boards have at least one woman (although of course this means 51 percent lack even one); and (iv) 60 percent of issuers have at least one woman in an executive officer position.

Aspects of the Report are striking and in some cases concerning:

  • Policies regarding gender representation on boards: 65 percent of issuers decided not to adopt written policies. This is concerning because a written policy will likely articulate commitment to, and position on an issue, and may be viewed as a signal that the subject-matter is important. Policies may also include goals or targets, and these are more likely to be achieved when quantified and, as part of the issuer’s policy-review processes, periodically re-evaluated.

    Additionally, 11 percent of issuers disclosed that they had a general diversity policy that did not address identification and nomination of women directors. However, as the Report explains, this may not be enough to comply with the Rule. To properly address gender equity and the Rule, policies should specifically address gender representation.

  • Term limits or other mechanisms for renewal: The reasons given for not adopting term limits highlight some of the complexities, balancing and trade-offs in achieving gender equality. Of the 137 issuers which imposed director term limits, 76 percent set an age limit (53 percent set age limits only, while 23 percent set both age and tenure limits). Term limits are important because insufficient vacancies limit opportunities for women. But, as cited by 35 percent of non-complying issuers, term limits may seem arbitrary. Term limits may also reduce continuity and experience on boards (cited by 51 percent of non-complying issuers) and may force out valuable, experienced and knowledgeable directors (cited by 39 percent of non-complying issuers).

    Additionally, age limits may add a competing human rights element to the gender equality narrative, as it may emit a hint of ageism. Age-based mechanisms may also seem incongruous with recent statistics that raised concerns about the aging of the Canadian workforce and the potential need to retain older workers.


  • Consideration of gender representation: Of issuers that did not specifically consider gender representation in making board appointments, the most common reason was that they sought the best candidates regardless of gender (cited by 84%), and 4 percent said they wanted to select from the broadest possible candidate pool. Of those that did not consider gender representation in making executive officer appointments, 88 percent said that was because selection was merit-based, while 7 percent said they wanted to select from the broadest possible talent pool. However this approach may have the unintended and opposite effect of limiting talent pools and the calibre of candidates, by failing to attract women.

    Consider for example, the technology company in a National Public Radio (NPR) story (see The Chief of Operations (COO) realized that the company had few female engineers and few who were not of certain ethnicities. He wanted to appeal to under-represented groups, partly to compete for talent against employers like Google and Facebook. He discovered that the company was turning off or turning down minorities, so he sought help from Unitive, a start-up that helps employers develop job postings that attract a broader range of candidates and structure interviews to mitigate interviewers’ biases. Unitive’s CEO explained that companies often erred by using certain phrases like “work hard, play hard” or “fast-paced”, which telegraphed “mainstream male” to potential candidates. By considering the gender diversity issue and making changes, applications increased 30 percent and female-hires doubled. The COO said one new-hire is a top team-member who is also a Middle Eastern woman who “would’ve frankly…never applied…much less gotten hired”.

Gender biases in hiring are well-documented and should be considered. In one study, participants evaluated resumes which were identical except for candidates’ names. Participants concluded that candidates with male-sounding names were more talented and were selected more often and at higher salaries. (See

Limitations and next steps

Understandably, the disclosure requirements are relatively static or quantitative measures, but there is an elusive qualitative dimension to gender equality, that warrants consideration. Real advances involve more than attracting females to the ranks or meeting a target number of female appointments. Real advances involve retaining women who derive a reasonable level of professional satisfaction and happiness from their roles. This is best achieved if issuers view the Rule and gender equality as an opportunity to create a competitive advantage, as opposed to an administrative burden. Forward-thinking issuers may go a step further and promote gender equality throughout their supply chains.  

Measures that may help issuers create this competitive advantage include: identifying talented women for training programs and encouraging them to apply for more senior roles; developing flexible scheduling and other family-friendly policies for mid-career women; and implementing sponsorship and mentoring programs. Other key strategies not cited in the sample disclosure include gender-specific leadership training, sponsorship and mentoring programs. A sample disclosure on Page 9 of the Report provides some examples of these gender-specific measures.

Issuers should also focus on internal promotion practices and building supportive corporate cultures. Companies often complete surveys or meet other quantitative criteria to earn accolades like “best place for women to work” or “top diversity employer”, but the day-to-day often reflects a different reality for women, who report various negative experiences including gender-biased evaluation systems and incompatible leadership and communication styles. Absent training and other measures to obtain buy-in across the organization, top-level policies and awards that espouse gender equality may not permeate the “real” corporate culture.

Gender equality translates directly to company and global bottom lines. In Grant Thornton’s “Women in Business: The Value of Diversity”, based on return on assets, companies with female participation in day-to-day operations outperform companies without female representation. The opportunity cost or profit foregone by male-only boards was $655B (estimate based on 1,050 companies across the US, UK and India). (See: North America and Oceania could add as much as 19 percent or $5.3 trillion to Gross Domestic Product (by 2025) if women participated equally in the economy. (See McKinsey’s full report or executive summary at:

Read the CSA Report here.

Apolone Gentles, JD, CPA,CGA, FCCA, Bsc (Hons)

Apolone Gentles is a CPA,CGA and Ontario lawyer and editor with over 20 years of business experience. Apolone is leveraging 20 years of business and accounting experience to build a commercial litigation practice with an emphasis on construction law. She has held senior leadership roles in non-profit organizations, leading finance, human resources, information technology and facilities teams. She has also held senior roles in audit and assurance services at a “Big Four” audit firm. Apolone has also lectured in Auditing, Economics and Business at post-secondary schools. Read more here

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