A new StatsCan report looked at some 10,100 companies conducting business in Canada – publicly traded and private corporations, along with government business enterprises such as Canada Post – and found overall that just 18.1% of director seats were held by women in 2017; 61.2% had zero women, 27.7% had one female director and just 11.1% had more than one.
Starting in 2015, the Ontario Securities Commission required companies listed on the Toronto Stock Exchange to disclose the number and proportion of women on their boards, among other requirements. The percentage of women being appointed as new directors at Canada’s 100 largest companies by revenue actually slowed to 30% in 2018 from 40% in 2014-2017.
This is not from a lack of qualified female candidates. Thousands of smart, educated women have been certified as board candidates by the Institute for Corporate Directors and are trying to find an opening. Consciously or not, male-dominated boards are not making effective efforts to add them.
Not only is the status quo indefensible, but research published in the Journal of Empirical Science suggests it is also detrimental for business, sustainability and risk management. See Why female board representation matters: The role of female directors in reducing male CEO overconfidence.
As reported in the Harvard Business Review female board members help to temper the overconfidence of male CEOs and improve overall decision making for the company:
One benefit of having female directors on the board is a greater diversity of viewpoints, which is purported to improve the quality of board deliberations, especially when complex issues are involved, because different perspectives can increase the amount of information available. At the same time, research has found that female directors tend to be less conformist and more likely to express their independent views than male directors because they do not belong to old-boy networks. So a board with female directors might be more likely to challenge the CEO and push him to consider a wider range of options, as well as pros and cons, when making strategic firm decisions. This could then attenuate CEO overconfidence and correct for potentially biased beliefs.
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