New recommendations promote the presence of at least 40% of people who identify as women on boards of directors. We are a long way off.
The milestone of 40% is one of the conclusions of a report commissioned by the TMX Group, operator of the Toronto Stock Exchange and the non-profit organization Institute of Corporate Directors (IAS). The recommendation therefore pushes the regulatory suggestions a little further, which since December 31, 2014 has adopted the “comply or explain” approach to disclosure.
This was followed by the entry into force, in January 2020, of the Canada Business Corporations Act with the objective of “increasing the diversity observed within the boards of directors and senior management of companies listed on the stock exchange”.
A quota in Europe
The TMX report is published less than three weeks after the adoption by the European Union of new rules forcing companies listed on the stock exchange to have a minimum quota of women in administrative positions or risk penalties. Member States have two years to apply the new directive.
“In detail, large companies listed on the stock exchange will have until July 2026 to put in place “transparent recruitment procedures”, so that at least 40% of non-executive director positions or 33% of all administrator positions are occupied by the under-represented sex”, i.e. women, most of the time, we find in a text from Agence France-Presse. Small and medium-sized enterprises with less than 250 employees are not affected by this obligation. Of all the EU’s largest listed companies, women held 30.6% of board seats in 2021
administration.
Returning to Canada, according to another report published in October, this time by the firm Osler, women now hold 26% of seats on boards of directors. At most, we can see a clear increase compared to the percentage of 10% measured in 2015, following the entry into force of the legislative change.
The world average
However, this representativeness is higher among larger companies. Thus, for the companies that make up the S&P/TSX benchmark index, a third of all seats on the boards of directors are held by women. This percentage rises to 36% for companies grouped within the S&P/TSX 60 index.
“For the first time, there is no all-male board of directors among the companies in the S&P/TSX Composite Index, and none of the companies in the
S&P/TSX 60 has fewer than two women directors,” added Osler.
In contrast, of all companies listed on the Toronto Stock Exchange, 11.6% of boards have no female directors. This last reading, however, exceeded 47% in 2015. Better still, “43.6% of new seats on boards of directors were given to women last year”, continues the firm.
On a global scale, the firm
Deloitte figures that the global average is just under 20% (19.7%), an increase of 2.8 percentage points since the publication of its last report in 2019. “If this rate of change were to maintain every two years, we can expect to reach near parity in 2041,” she points out.