The call for gender parity on boards continues to be echoed throughout the world of business and politics. Although it is difficult to prove the connection between the presence of women on the board and the performance of corporate entities (cause and effect or mere correlation?) the positive impact of diversity on boards and within the corporate world seems to please just about everyone: the mix “is a source of discussion and promotes a variety of views on a variety of social issues. This leads to better decision-making”.
So what is being done in Canada and on a global scale to take action and increase the number of women on boards to achieve this parity? There are good models to be followed, measures that are proven to work and others, less so…
Women on boards: the Canadian perspective
Canada is often cited as an example in terms of equality and diversity but what are the measures already in place here and what are their outcomes?
The measures put in place by the Trudeau government (besides having a diversified and egalitarian government) are based on the principle of comply or explain. This means that publicly traded companies have a duty to “disclose their selection processes, policies and quantitative objectives referred to in the regulations annually. Thus, failing to have raised the number of women on their boards, executives would be required to explain themselves publicly”.
This is a measure that has produced average results. The increase in women is marginal, going from 11 % to 12 % between 2015 and 2016. Consequently, as the title of an article published by La Presse on March 7 th explained, the increase of women on boards happens “one very small step at a time”.
For its part, the province of Ontario has taken the lead in adopting targets of their own in addition to the comply or explain measure: “By 2017, businesses in the province will be required to have 30 % female managers and by 2019, that target will increase to 40 %”.
However, Québec did even better than its counterpart. In 2016, women filled 18% of positions on the board of directors.
This is owing to the Act respecting the governance of state-owned enterprises, which requires state-owned enterprises to be made up of women and men equally as of December 14, 2011. Since then, the results have been very promising: “Overall representation of women on the boards of public organizations rose from 28 % to 52.4 %. This dramatic increase in women’s participation in the decision-making process of these organizations weakens the scepticism of the Act’s credibility when it came into effect.”
Gender parity in Canada seems to be on track and results vary according provincial policies. But
Which countries are setting a good example as to how to achieve gender parity on boards?
Thanks to their excellent childcare services and paternity leave, Scandinavian countries are the best example of achieving gender parity. These programs make it easier for women to enter the workforce. That plus a binding legislation and you get rates of women on boards reaching 43%.
Norway is the real pioneer in this regard. Since 2006, a law in place states that women must occupy 40% of boards. Sweden just implemented the same quota for listed companies, risking a fine in the case of non-compliance.
Norway has a rate of 43% of women on boards of directors, followed by France at 41% and Sweden at 37%. Italy, Germany, Finland and Belgium are close to or above 30%.
France is able to achieve this result thanks to the laws in place since 2011 in favour of equality between men and women in large listed companies and public enterprises.
According to Selim Jahan, director of the Human Development Report published annually by the UNDP (United Nations Development Program): “Quotas allow for greater progress when decisions are made by the state, in a binding manner, within a legal framework.”
Quotas make it possible to secure the presence of women in decision-making positions in the larger cultural framework and to remedy the under-representation of women on boards, in executive positions and as elected officials.
Lastly, according to the 2016 Global Report on Gender, Rwanda ranks fifth in the world thanks to the strong participation of women in politics. 64% of women are elected to the Rwandan parliament versus 26% in Canada.
Diversity is beneficial for companies and quotas are proving successful in Europe. We need not forget that gender equality has been protected under the Canadian Constitution since the 1980s. So why is Canada waiting to implement its own laws and ensure that women have the same opportunities as men? If you change nothing, nothing will change! Clearly, setting goals and making recommendations isn’t cutting it. It’s time to catch up!