Quebec companies stand out for the importance they place on female representation on their board of directors. However, they display the same timidity as companies in the rest of Canada when reading about senior management.
Since the entry into force, at the end of 2014, of the regulations on Information concerning the representation of women on the boards of directors of reporting issuers, the percentage of director positions held by women has increased from 11% to 22%. Admittedly, there has been a doubling over this seven-year horizon, but female representation is still far from the global benchmark, which places the optimal gender parity zone between 40 and 60%.
Depending on the size of the companies, it grew much more strongly in the small market capitalizations, i.e. from 8 to 16% in the time interval for the capitalizations of less than 1 billion dollars, and from 11 to 24% for those between 1 and 2 billion. The percentage of seats occupied by a woman rose from 17 to 28% for capitalizations between 2 and 10 billion, and from 21 to 30% for larger sizes.
Data from the Canadian Securities Administrators (CSA) on a group of 599 issuers whose year-end fell between December 31, 2020 and March 31, 2021 also indicates that the number of them having at least one woman their advice now stands at 82%, up from 49% in the first edition of the annual review. This means that there is no female director for 18% of these issuers. In addition, barely 6% of the positions of Chairman of the Board are held by a woman.
Quebec comparison
Based on these data from the CSA, Louise Champoux-Paillé, certified corporate director, distinguished, in a study published Monday, the issuers according to whether they came under the federal government or the province of Quebec. Of the 599 issuers in the sample, 57 belong to the second group. There is a clear demarcation. The percentage of women on boards of directors is close to 26% among Quebec issuers, compared to 21% for those under federal jurisdiction. More conclusively, the percentage of issuers having reached the parity zone amounts to 11% and 7% respectively, to 23% and 17% respectively in the 30-39% segment of female representation.
“It is reasonable to think that our Quebec companies would be more sensitive to the importance of female representation on their boards of directors since only one company [soit 2 % de l’échantillon] does not have any women on its board of directors, while this percentage reaches 18% for all the issuers covered by this disclosure exercise”, highlights Ms.me Champoux-Paillé. This percentage is 20% for issuers under federal jurisdiction.
But there the Quebec advance stops. When the reading extends to the presence of women in senior management positions, we obtain the same rate in the two groups, with only 5% of women in the functions of CEO, between 16 and 18% in those of chief financial officer. “This situation is all the more worrying because with the pandemic, many women have chosen to put their careers on hold or to favor part-time jobs in order to give themselves more flexibility to absorb the extra work at home. . »
Beyond the effects of the pandemic, Mme Champoux-Paillé cites a study and an analysis pointing out that the choice of part-time work or a job offering the necessary flexibility for work-family balance has repercussions both on long-term compensation and on the choice of career paths.
This choice often means that women will choose support jobs (so-called staff “) rather than directly related to the organization’s business model or day-to-day operations (referred to as ” line “). A McKenzie study reveals that women work more in support positions, in areas such as communications or legal services, while the majority of men hold so-called operational positions such as director of sales, technology , of business units, writes Mme Champoux-Paillé. “However, we know that support jobs more rarely lead to the position of president and general manager, vice-president of subsidiaries or business units,” she adds.
The director could have reiterated that experience as CEO remains an important criterion in the selection of a director.
Little reminder
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” has been in force since January 2020.
This extension follows the entry into force, on December 31, 2014, of the regulations on Information concerning the representation of women on the boards of directors and bodies of reporting issuers. In Canada, regulators have not adopted the quota formula, preferring instead a disclosure approach extending to senior management under the “comply or explain” formula.
We are therefore talking about a moral, non-binding commitment, which is however part of a more general movement of adoption of environmental, social and governance criteria among investors recognizing the scope and contribution of diversity.