The familiar image of men sitting around a boardroom table is no longer representative of the winning business model, according to the latest 2007 Catalyst Census of Women Board Directors of the FP 500: Voices from the Boardroom, released today. In fact, the study suggests that the persistent under-representation of women on corporate boards and the extremely slow pace of change might have disturbing implications for company performance and governance in Canada.
The 2007 Catalyst Census found that women represent 13 percent of corporate board seats in the FP500, an increase of only one percentage point since 2005. Over 40 percent of FP500 companies in Canada have no women directors on their boards.
“The tendency for boards to recruit from the same narrow pool of candidates acts as a barrier to women seeking board seats,” said Catalyst Vice President North America, Deborah Gillis. “Board chairs, CEOs and corporate governance chairs are in unique positions to jump-start the process and drive change. By championing gender diversity and looking beyond the C-suite and FP500 boards to find qualified women directors, they can provide a better, more transparent environment in which Canadian businesses can succeed.”
Additional key findings from the study support casting a wider net in order to increase women’s representation in Canadian boardrooms.
- Over 20 percent of vacant board seats and 30.5 percent of board seats in public companies were filled by individuals already serving on a corporate board.
- Women were “recycled” in public companies at greater rates than their male colleagues–40 percent of female directors as compared to 28.9 percent of male directors sit on multiple FP500 boards.
Previous research from Catalyst shows that, on average, companies with more women on corporate boards financially outperform those with the fewest. The women directors we interviewed told us that enhancing gender diversity at the board level raises the quality of discussion around the table. This has the potential to yield real improvements in the overall quality of governance which, in turn, will be reflected in company performance. Yet, despite this compelling business case for more women on boards, the pace of change is frustratingly slow.
To understand why, Catalyst interviewed close to 60 FP500 women board directors to understand their perspectives on the slow pace of change. They responded that the positions, opportunities and networks which have been so vital to their own success are still not available or accessible to many women in corporate Canada. They also noted that while talented potential directors exist outside the C-suite, recruiters seeking new directors usually return to this group of “usual suspects” where women’s representation continues to be low.
Although progress is slow, the Census study did reveal small signs of progress:
- The number of companies with multiple women directors increased by 2.5 percentage points since 2005 to 28.5 percent.
- Women’s representation as board chairs increased 1.3 percentage points since 2005 to 3.4 percent.
- The percentage of key public company board committee chairs held by women rose one percentage point to 6.8 percent.
The study outlines a few ways that companies can broaden their search for potential candidates:
- Demand a diverse slate of candidates.
- Update and create skills matrices to determine what competencies are currently represented on the board, and what other skills are needed.
- Search out candidates who will fulfill a company’s competency needs in various industries.
- Look beyond the C-Suite (i.e. COO, CEO, CFO) for qualified candidates with track records in other senior level positions.
CIBC is the study’s lead sponsor. McKinsey & Company Canada and Pricewaterhouse Coopers LLP, Canada are the supporting sponsors. For media inquiries, please contact Charmain Emerson, Building Block Communications, (416) 588-8514 (work), (416) 857-9401 (mobile), [email protected]; or Susan Nierenberg, Catalyst, (646) 388-7744 (direct), (212) 514-7600 ext. 333 (work), [email protected]
Founded in 1962, Catalyst is the leading nonprofit membership organization working globally with businesses and the professions to build inclusive workplaces and expand opportunities for women and business. With offices in the United States, Canada, and Europe, and the support of more than 370 member organizations, Catalyst is the premier resource for research, information, and trusted advice about women at work. Catalyst annually honors exemplary organizational initiatives that promote women’s advancement with the Catalyst Award.