Report: 2023 Diversity Disclosure Practices – Diversity and leadership at Canadian public companies

Table of contents

• Introduction
• Developments in diversity: Women and other underrepresented groups
• Diversity disclosure results for 2022: the complete picture
• Mid-year results for 2023: Women on boards
• Mid-year results for 2023: Women in executive officer positions
• Diversity beyond gender: 2023 results for CBCA corporations
• Best Practices: Who has achieved gender parity, voluntary disclosure of underrepresented groups and how to increase diversity
• Going above and beyond: Best company disclosure
• Our methodology

---

The 2023 Diversity Disclosure Practices report provides general information only and does not constitute legal or other professional advice. Specific advice should be sought in connection with your circumstances. For more information, please contact Osler’s Corporate Governance group.

Download the full report [PDF]

---

Introduction

Canada’s board diversity journey has been a study in ongoing change. After nine years of disclosure, it would not be a surprise if progress in increasing the representation of women on boards began to show signs of slowing. Yet we continue to see the proportion of women on boards increase year over year at a rate comparable to prior years. A similar trend is beginning to emerge with respect to the representation of directors from visible minorities, although there has been little to no progress among Indigenous peoples and persons with a disability at the board level.

Among executive officers, the proportion of women has increased significantly annually among Canada’s largest companies for the last few years, but this pattern has been primarily driven by the S&P/TSX Composite Index companies and not yet been emulated by smaller companies. And virtually no progress has been made among Indigenous peoples and persons with a disability at the executive officer level.

This, our ninth annual report, once again provides detailed disclosure on the representation of women in senior leadership positions at TSX-listed companies as well as the representation of women, members of visible minorities, Indigenous peoples and persons with disabilities at publicly-traded corporations governed by the Canada Business Corporations Act (CBCA). We also highlight disclosed best practices to improve diversity and inclusion as well as samples of excellence in disclosure.

Women are being added to boards at their fastest rate ever

To achieve parity, new or vacant positions need to be filled by women candidates at least half the time. Canadian companies are getting close – and the rate at which women were added to boards this year is higher than reported in any of our prior reports. Among the 532 board positions which were newly created or vacated, a woman was chosen to fill the position 45.3% of the time. This result reflects a push by companies which had only one woman director to add more women, significantly reducing the number of one-woman boards.

Almost 30%

Women hold almost 30% of all board seats among TSX-listed companies. The jump in the rate at which women are being appointed to boards boosted the percentage of board seats held by women to 29% compared to 26% last year. Larger companies continue to demonstrate better diversity, with women holding 36.2% of all board seats among the S&P/TSX Composite Index companies and 38.2% of all board seats among the S&P/TSX 60 companies. In light of this result, it comes as no surprise that among the 278 companies that have adopted targets for women directors, two-thirds (66.9%) have adopted a target of 30%.

Yet there was little change in the percentage of TSX-listed companies with all-male boards. The percentage declined only slightly to 10.6% (67 companies) compared to 11.6% in 2022. These holdouts are smaller companies since, like last year, there were no single gender boards among the S&P/TSX Composite Index companies. Absent a legal requirement to enhance their board diversity, it is unclear what would motivate any of these 67 companies, one-third of which are mining companies, to make a change.

One out of every 10 directors is from a visible minority

CBCA corporations continue to add directors who are from a visible minority at an increasing rate. This year, visible minority directors hold 10.2% of board seats among all CBCA corporations providing disclosure, compared to 8.3% in 2022 and 6.8% in 2021. This progress reflects a growing demand by investors for visible minority representation on boards, and is consistent with initiatives to increase ethnic diversity on the boards of U.K. companies and the representation of underrepresented groups under NASDAQ listing requirements.

The proportion of Indigenous directors and directors who are persons with a disability, however, was essentially unchanged compared to last year.

The proportion of women executive officers is growing, but not for diversity beyond gender

Women are making increasing inroads into the C-suite, although at a slow rate. On average, 21% of executive officers are women, compared to 20% in 2022 and 18% in 2021. Among S&P/TSX 60 companies, one out of every four executive officers (27%) is a woman.

The average number of executive officers who are members of visible minorities increased significantly from mid-year 2022 and there is now on average 0.88 visible minority executive officers per CBCA company. However, the average number of executive officers who are Indigenous peoples or persons with a disability was virtually unchanged year over year.

More to come

Although the proportion of women on Canadian boards continues to increase, and gender diversity on boards in Canada is on a par with levels on U.S. and Australian boards, progress lags that made in other jurisdictions. Even among Canada’s largest companies, gender diversity has not reached the 40% level reached by the 350 largest companies in the United Kingdom, nor the levels achieved in jurisdictions which have adopted quotas. We expect continued increases in the proportion of women directors. We also expect the proportion of executive officers to continue to rise, although at a slower rate. Current interest in increasing visible minority representation on public company boards should result in increased representation, potentially at an increased rate if the Canadian Securities Administrators (CSA) mandate disclosure of visible minority representation. The journey is not over and we hope this report will help inspire continued progress.

Highlights

We recognize that there are a range of terms used to reference the various diversity characteristics referred to in this report. Different companies make different choices in this regard. Since our report is based on disclosure made by companies in response to legislated disclosure requirements, we have generally used the same terms as the legislation where applicable to avoid confusion. However, we have chosen to use the term ‘Indigenous peoples’ to include references to Indians, Inuit and Metis peoples covered by the term ‘Aboriginal peoples’ in the legislation referenced by the CBCA Requirement.

---

Developments in diversity: Women and other underrepresented groups

Over the past year, reports in Canada and internationally that track the progress being made in enhancing diversity practices at the board level have found continued improvement. The U.K.’s success in achieving over 40% women directors and more than 11% ethnic minority directors by the end of 2022 is particularly noteworthy. In the U.S., progress continues as well, but practices for enhancing diversity are being closely scrutinized and sometimes challenged.

Developments in Canada

Proposals to revise diversity disclosure requirements

In April 2023, the Canadian Securities Administrators (CSA) issued updates to diversity and director nomination process disclosure requirements under Canadian securities laws for comment. These updates proposed two alternative approaches.

Both proposals retained the existing disclosure emphasis regarding women in leadership roles, but suggested removing or reframing some of those disclosure requirements which do not elicit meaningful disclosure. However, the proposals reflected markedly different approaches to diversity beyond gender. One alternative would have provided issuers with flexibility in defining which diversity characteristics (other than gender) to make the subject of disclosure as well as flexibility in describing the issuer’s approach to achieving or maintaining diversity. The other alternative would have required disclosure with respect to specific groups – racialized persons, Indigenous peoples, persons with disabilities and LGBTQ2S+ persons – and reporting would have been presented using standard tables.

The proposals also included new guidance for the adoption of practices for enhancing diversity. The more flexible approach contemplated an issuer adopting a diversity process and suggested different mechanisms that might be incorporated in the process. The other alternative contemplated adoption of a written diversity policy with objectives that are specific, measurable and time-bound. It also listed matters that the policy should address, including the ability of directors to engage independent advisors to assist in identifying candidates; requiring advisors to present a diverse slate of candidates for consideration; contemplation of changes to the policy, the board composition and recruitment process that are necessary to achieve the objectives outlined in the policy; and a process for assessing the board’s effectiveness at implementing the policy.

Finally, the proposals included new requirements and guidance with respect to the board nomination process, which appear to have been intended to make the process more transparent.

Our Update offers further details.

Reports on diversity in Canada

CSA Multilateral Staff Notice 58-316 [PDF], released in October 2023, summarized the results of the CSA’s review of disclosure by issuers in 2023 in response to the Diversity Disclosure Requirement. The CSA reported that 27% of board seats are held by women, a 3% increase from 2022. The proportion of vacated board seats being filled by women was 43% (down slightly from 45% in 2022). The CSA noted there was a slight increase in adoption rates of written board policies (64% vs. 61% in 2022) and the adoption of targets for women directors (43% vs. 39% in 2022), but little change in the proportion of issuers adopting targets for women executive officers (5%).

Corporations Canada released its third annual report in May 2023 of disclosure by issuers in response to the CBCA Requirement. The report found that in 2022 the percentage of board seats held by: women was 19%; Indigenous peoples was 0.6%; visible minorities was 6%; and persons with disabilities was 0.4%. These results were slightly lower than the previous year for women and visible minorities, slightly higher for Indigenous peoples and unchanged for persons with disabilities. The report also revealed some improvement at the senior management level – where women held 27% of positions, Indigenous peoples held 0.4%, visible minorities held 12% and persons with disabilities held 1.2% – reflecting increases in all categories except Indigenous peoples.

In May 2023, Statistics Canada released a report on the representation of women on boards and in officer positions at publicly traded corporations, privately held corporations and government business enterprises. The report noted that women held 20.5% of all board seats in 2020. While the representation was higher for government business entities (34.8%) and publicly traded corporations (25.2%), the average was lower due to the impact of the large proportion of private enterprises (where women directors represented just 19.8%).

The Equity Benchmarking Project, led by The Equitable Recovery Collective and Imagine Canada, and sponsored by Scotiabank, released a report [PDF] in July 2023 detailing the results of a survey on equity, diversity and inclusion practices across Canada’s not-for-profit sector. The project analyzed the responses from 1,655 organizations with the aim of understanding how they are enhancing their equity practices. Among other results, the report found that one-third of not-for-profit organizations had established an equity working group; further, those organizations were more likely to have taken steps to enhance their equity, diversity and inclusion (EDI) practices. Approximately 44% of organizations had adopted a stand-alone document relating to EDI, although 82% had at least one policy in which EDI is highlighted. The report notes that while most organizations (79%) gather equity-related information about the communities they serve, 39% of those who do gather the information do not actually use the information.

Other Canadian developments

Shareholder proposals requesting a third-party racial equity audit continued to be made this proxy season. Four Canadian banks received proposals this year. The proposals were withdrawn at Canadian Imperial Bank of Commerce and National Bank of Canada when each bank committed to launch audits in response to the proposals. The proposals were defeated at Bank of Montreal (60.4% against) and Royal Bank of Canada (57.8% against). The shareholder proposals the banks received were drafted broadly; they sought an analysis of each bank’s adverse impacts on racialized communities generally, but focused more on products and services than employment.

The Committee on the Future of Corporate Governance in Canada – sponsored by the Institute of Corporate Directors and the TMX Group Limited – issued its report [PDF] in December 2022. Among other things, it recommended that every board should reflect the diversity of the company’s stakeholders and that boards should set targets based on self-identification of no less than 40% men and 40% women, leaving room for other gender identification categories, as well as having at least 30% representation from underrepresented racial groups, Indigenous persons in Canada and people with disabilities.

In January 2023, Ontario Teachers’ Pension Plan revised its proxy voting guidelines to require large cap companies on developed market indices to increase their board gender diversity to a minimum of 40% women.

Developments around the world

Diversity generally

Using data provided by Equilar, 50/50 Women on Boards reported [PDF] that in the U.S., women held 28.4% of the corporate board seats among the Russell 3000 index companies as of December 31, 2022. This represents a 1.7 percentage point increase from December 31, 2021.

NASDAQ slightly delayed the compliance deadline for certain of its board diversity listing rules. Under a rule change which became effective on December 14, 2022, listed companies now have until December 31, 2023 to have at least one diverse director or explain why they do not, and must have at least two diverse directors by December 31, 2025 or explain why they do not. Our Update provides further details on NASDAQ’s listing requirements.

In June 2023, the U.S. Supreme Court held that the admissions programs at Harvard College and the University of North Carolina, which considered race as one of many factors when determining the incoming class of students, violated the equal protection clause of the U.S. Constitution. The Court ruled that colleges and universities may only consider “an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise” in assessing the quality of character or unique ability of an applicant to contribute to the school. In the aftermath of the decision, Attorneys General from 13 U.S. states sent letters to Fortune 100 companies warning against using racial preferences or quotas in employment and contract decisions. A further 21 Attorneys General responded not long thereafter with letters emphasizing the legality and necessity of pursuing EDI initiatives. Although the decision is not directly applicable to private companies, it remains to be seen whether it will influence practices on adoption of goals or targets for enhancing diversity.

Bloomberg Law reported in April 2023 that almost 40 lawsuits have been filed against U.S. companies relating to disclosure of their EDI initiatives. The suits allege companies failed to live up to their EDI aspirations or, in some cases, implemented goals that allegedly fall outside a company’s mission to return value to shareholders. However, other lawsuits and complaints filed with the Equal Employment Opportunity Commission in the U.S. have been pursued on the basis that the company’s stated EDI goals violate state or federal civil rights laws.

According to the Watermark Search International 2022 Board Diversity Index [PDF], among the companies included in the S&P/ASX 300 Index in Australia, women held 35% of the board seats at the end of 2022, with the average being 36% among the top 100 companies, 34% among the next 100 and 31% among the last 100 companies. The report also noted that only 10% of S&P/ASX 300 directors were of non-Anglo-Celtic backgrounds and only six board seats were occupied by an Indigenous person.

In September 2023, the U.K. Financial Conduct Authority and Prudential Regulation Authority released consultation papers on proposed revisions to their regulatory approach with respect to diversity and inclusion in the financial sector. The proposals would require companies in the financial sector to have a diversity and inclusion strategy. Larger firms with over 250 employees would be required to set targets for diversity at the board, senior leadership and the workforce generally; but while it is expected targets would relate to women and ethnicity at a minimum, firms would be free to choose their own targets. Larger firms also would be required to report on their measures to support inclusion and larger firms would provide data on their diversity progress to regulators. Final rules are expected to be issued in 2024.

Representation of women

The FTSE Women Leaders Review issued in February 2023 [PDF] reported that in 2022 women’s representation on the boards of the 350 largest public companies in the U.K. had reached 40.2%. The report notes that this result was achieved on a voluntary disclosure basis and surpasses the results achieved using quotas in other jurisdictions (except France). As a result of achieving the 40% target, the focus of the current report, and likely future reports, is principally on the representation of women in senior management roles. The report notes that the number of women in executive committee and direct report roles at FTSE 100 companies increased to 34.3% (from 32.5%) and to 33% (from 30.7%) among the next 250 FTSE companies.

In November 2022, the European Parliament adopted the long-delayed Women on Boards directive. EU member states are required to implement rules requiring that 40% of all non-executive director positions and 33% of all director positions at listed companies with 250 or more employees be occupied by women by June 30, 2026. Member states must also enact penalties for failing to comply with these requirements, which may include annulling a non-compliant board of directors.

Other diversity characteristics

It is evident from the range of terms used to describe diversity characteristics beyond gender and the lack of agreement on a singular approach to revising diversity disclosure requirements under Canadian securities laws that there are challenges in determining which characteristics to report on beyond gender. Visible minority status, also described as race, ethnicity or BIPOC (Black, Indigenous and people of colour), is often the subject of focus. Other groups that have received attention are persons with disabilities and LGBTQ2S+ people. We have highlighted new developments in these areas from the past year.

The March 2023 update from the Parker Review [PDF] in the U.K. reported that as at the end of 2022, 96% of the FTSE 100 companies and 67% of the next 250 FTSE companies had at least one ethnic minority director on their board. Ethnic minority directors represented 18% of director positions among the FTSE 100 companies and 11% of director positions among the next 250 FTSE companies. Going forward, the Parker Review will be focusing on encouraging ethnic minority representation among senior management and is asking FTSE 350 companies to set a target by December 2023 for the percentage of their senior management who selfidentify as being in an ethnic minority, with that target to be achieved by December 2027.

A report from Ascend Pinnacle and the KPMG Board Leadership Centre [PDF] in September 2022 found that in 2021 Asians occupied 4% of the seats on boards of the Fortune 1000 (although Asians comprise 7% of the U.S. population) and 31% of the Fortune 1000 companies have at least one Asian director.

A July 2023 report from the African American Directors Forum and the KPMG Board Leadership Centre [PDF] found that as of September 2022 African American directors occupied 10% of the board seats of the Fortune 1000 (although African Americans comprise 14% of the U.S. population) and 76% of the Fortune 1000 companies have at least one African American director.

Institutional Shareholder Services has revised its proxy voting policy to provide that starting in February 1, 2024 for S&P/TSX Composite Index companies it will generally vote against or withhold from the chair of the nominating committee where the board has no apparent racially or ethnically diverse directors.

An April 2023 report from Out Leadership found that as of March 2023, only 0.8% of board seats in the Fortune 1000 were occupied by LGBTQ+ directors. The report also found that there has been rapid adoption of LGBTQ+ inclusive board diversity policies and 23.2% of Fortune 1000 companies now have one. It attributes this to the board diversity listing requirements adopted by NASDAQ which included LGBTQ+ as a category for which disclosure is required.

The Disability Equality Index, a joint initiative of Disability:IN and the American Association of People with Disabilities, now includes 485 companies which voluntarily submit information about their disability inclusion practices. The 2023 report of the Disability Equality Index notes that only 7% of the companies included in the index have a director who identifies as disabled and only 7% mention disability in the documents that govern director nominations.

In light of the progress that has been and is continuing to be made to boost the proportion of women on public company boards, increasing attention will turn to improving the proportion of women executives, as well as the degree to which other diversity characteristics are represented on boards and in management positions.

---

Diversity disclosure results for 2022: the complete picture

Women on boards in 2022

Some important milestones were achieved in 2022 on the representation of women on boards. For the full year ended December 31, 2022, 703 companies disclosed the number of women on their boards. For these organizations, we counted a total of approximately 5,525 board seats, 1,431 of which were held by women. Based on these results, women held 25.9% of the total board seats among companies providing disclosure, surpassing the halfway point on the road to parity. These findings reflect an increase of 2.5 percentage points compared to full-year 2021.

For the corresponding S&P/TSX 60 companies, there were 635 total board seats, 228 of which were held by women for full-year 2022, representing approximately 35.9% of the total board seats among the 55 members of the S&P/TSX 60 providing disclosure. As in prior years, this year-end number represents a small decline from the 36.0% of the total board seats among the 52 members of the S&P/TSX 60 providing disclosure at mid-year 2022, but represents a gain of approximately 3.1 percentage points from full-year 2021.

For the first time, there were no all-male boards among the S&P/TSX Composite Index companies – we noted this in our mid-year 2022 results, and it remained true at year end. Our full-year results also showed that 33.2%, or almost one-third, of all board seats among the S&P/TSX Composite companies were held by women.

On a company-by-company basis, based on the data reported by the 703 companies disclosing the number of women on their boards, women held an average of 2.04 board seats, while the 686 companies that disclosed the percentage of women on their boards had an average of approximately 24.6% women directors. These results represent a meaningful increase from the corresponding full-year 2021 figures of 1.83 and 22.1%, respectively.

Canadian companies with little or no gender diversity continued to add more women to their boards during 2022. Of the 703 companies disclosing the number of women directors on their boards, 84 (11.9%) reported having no women on the board, representing an improvement from 16.1% for full-year 2021. A total of 199 companies (28.3%) had one woman director (representing a continued decrease from the 31.0% reported for 2021), and 420 (59.7%) reported having more than one woman on their board (a considerable increase from 52.9% in 2021). At 137 of the disclosing companies (representing 20.0% of those disclosing), women held 35% or more of the board seats.

Women executive officers in 2022

For full-year 2022, 646 companies disclosed information regarding the number of women executives employed by them, and 632 disclosed the percentage of their executive officers that are women. Companies that disclosed the number of women executives reported an average of 1.96 women executives and a total of 1,264 executive officer positions held by women. Among those that disclosed the percentage of women executives, an average of 19.9% of executive officer positions were held by women, which reflects an increase from the 18.3% reported for full-year 2021.

The prevalence of Canadian companies without gender diversity at an executive officer level continued to decline in 2022. For the 646 companies that disclosed the number of their women executive officers in full-year 2022, 28.8% reported having no women executive officers (compared to 33.5% for full-year 2021). A further 185 (28.6%) reported having one woman executive officer (up slightly from 28.0% in 2021) and companies reporting having more than one woman executive officer increased from 237 (or 38.4%) in full-year 2021 to 275 (or 42.6%) in full-year 2022. There was also an increase in the number of companies reporting more than 35% women executive officers for full-year 2022 (16.7% compared to 15.5% of reporting companies in 2021).

A significant proportion of companies continue to report that they take gender into account when identifying and appointing executive officers, with 565 of 678 companies (or 83.3%) reporting in full-year 2022 that they did so (up 0.8 percentage points from 82.5% in 2021).

*Percentages may not add to 100 due to rounding.

Breakdown by industry for full-year 2022

As demonstrated in Figures 4 and 5, the industries with the highest number and percentage of women directors in 2022 were Utilities & Pipelines and Communication & Media. Utilities & Pipelines reported the highest average number of women executive officers while Communication & Media reported the highest average percentage of women executive officers.

Diversity policies and targets for full year 2022

In 2022, there was a slight increase in the number of companies disclosing that they have board diversity policies (69.6%, up from 66.0%). This is reflected in Figure 6. Of those companies, 89.8% indicated that their policy also related to the identification and nomination of women directors.

Consistent with last year, there was also a sharp increase in the number of companies adopting targets for women directors in full-year 2022 – of the 694 companies that provided board diversity target disclosure in 2022, 40.5% indicated that they did have a target. This represents an increase of 9.3 percentage points from 2021. The percentage of companies disclosing that they have targets for women executive officers increased steadily, with 69 of the 614 companies providing disclosure for full-year 2022 (11.2%) indicating that they had such a target. The corresponding figure in 2021 was 9.9%. These results are illustrated by Figures 7.1 and 7.2.

Diversity beyond gender: Reporting by CBCA corporations for full year 2022

CBCA companies have now provided three years of diversity disclosure under the CBCA Requirement. That requirement extended reporting on the representation of women to venture issuers and required comparable disclosure with respect to the representation of members of visible minorities, Indigenous peoples and persons with disabilities.

With respect to women, reported results for the 375 CBCA corporations which provided disclosure were generally consistent with, but lower than, the reported results for all TSX-listed issuers – which is not surprising since, as we have noted elsewhere, a significant proportion of the CBCA companies which provided disclosure are listed on the TSX but the balance are smaller issuers.

For the 375 CBCA companies providing disclosure regarding the number of women on their boards, women held approximately 22.7% of the board seats (an increase from 21.3% in 2021), with an average of 1.62 women per board (up from 1.54 in 2021). For the 361 companies providing disclosure on the percentage of women on their boards, the average percentage was 20.4% (up 1.5 percentage points from 2021). The corresponding figures for women executive officers were an average number of 1.45 (339 companies), representing a slight increase from 1.23 in 2021, and an average percentage of 17.4% (327 companies), also representing a slight increase (1.3 percentage points).

With respect to other designated groups, full-year results for 2022 show progress compared to the prior year. Across all CBCA corporations, just under 10% of board positions are held by directors who are members of visible minorities, Indigenous peoples and persons with disabilities. However, such groups were still substantially underrepresented on Canadian boards compared to the proportion of the Canadian population such groups represent.

Overall, results for full-year 2022 reflect another year of continued slow progression for women regarding seats in the boardroom, although the adoption of both diversity policies and targets regarding women directors have both seen an overall increase. While the stagnant performance with respect to the representation of women in executive officer positions is unfortunately also consistent with previous years’ results and represents an obvious area for improvement, we continued to observe an increase in the number of companies disclosing that they have targets for women executive officers. The data for the third full year of disclosure regarding visible minorities, Indigenous peoples and persons with a disability, highlights that there is further room for improvement.

---

Mid-year results for 2023: Women on boards

Number and percentage of women directors

As of July 31, 2023, 632 companies had disclosed the number of women directors on their boards, with 1,429 board positions at these companies reported as being held by women out of a total of 5,016 board seats. Based on these results, women held 28.5% of the total board seats among companies providing disclosure for 2023. This represents another steady increase of 2.5 percentage points from mid-year 2022.

S&P/TSX 60 companies that provided disclosure during this period reported 234 of 612 total board seats were held by women. This represents 38.2% of board seats held by women among the 53 members of the index that provided disclosure of the number of women on their boards, and an increase of 2.2 percentage points compared to mid-year 2022 (36.0%).

On the broader S&P/TSX Composite Index, 740 of the 2,045 board seats, or 36.2%, were held by women. As noted in previous years’ reports, the S&P/TSX Composite Index results fall between those for the S&P/TSX 60 companies and the TSX companies more broadly. These results are broadly on par with the progress made in the U.S. and Australia, but lag the U.K. where women held 40.2% of the board seats among the FTSE 350 in 2022.

For the companies disclosing the number of women directors on their boards, there was an average of 2.26 board seats held by women, and for the 613 companies disclosing the percentage of women on their boards, there was an average of 27.2% of women directors on these boards. These figures reflect an increase from 2.05 and 24.7% for the corresponding period in 2022. As noted in Figures 9.1 and 9.2, a similar steady increase occurred among the S&P/TSX 60 companies.

In mid-year 2023 we saw a further decrease in the number of boards without any women directors among those companies disclosing the number of women on their boards – although the trend is slowing as the absolute number of such boards gets smaller. The number of such boards fell by approximately 1.0 percentage point to 10.6% from 11.6% in mid-year 2022 (compared to a decline of 4.1 percentage points between mid-year 2021 to mid-year 2022). For the second year, there were no all-male boards among the companies in the S&P/ TSX Composite Index that reported the number of women on their boards.

This year, boards that already had at least one woman director added more. As highlighted in Figures 11.1 and 11.2, 66.3% of the companies that reported the number of women on their board indicated that they now have more than one woman director – an increase of 6.3 percentage points compared to the same period last year, and a further gain from the 53.1% reported for mid-year 2021. While the number of companies reporting that they have two women on their board and the percentage of companies reporting that 25-34% of their board is comprised of women both declined slightly, this was accompanied by a significant increase in the number of boards with more than two women and the percentage of boards with 35% or more women. The trend towards adding more women directors likely reflects the continuing impact of ISS’ decision to recommend withholding votes on the chair of the nominating committee of S&P/TSX Composite companies if women make up less than 30% of the board and the board has not adopted a 30% target.

*Percentages may not add to 100 due to rounding.

Based on the disclosure provided, for mid-year 2023, women comprise 50% or more of the board at 39 companies – almost twice as many as for mid-year 2022 and a massive increase over the 13 companies who met this threshold for mid-year 2021. Of the companies reporting that their board is comprised of 50% or more women, almost half are on the S&P/TSX Composite Index.

Canada’s largest companies continue to be leaders in gender diversity, although in certain areas the gap is narrowing between the leaders and the broader group of companies subject to the Diversity Disclosure Requirement. The trend for relatively larger issuers to perform better on diversity measures is consistent with broader trends internationally and has remained constant in our data since the Diversity Disclosure Requirement was introduced.

Among the S&P/TSX 60 companies that disclosed the number of women directors on their board, there was an average of 4.42 women per company, which is up by 0.29 from the corresponding period in 2022. S&P/TSX 60 companies typically have three or more women directors. Among the 53 S&P/TSX 60 companies which provided disclosure, 98.1% (or 52 companies) had three or more board positions held by women, while only one company had two women directors. Among this group of companies, there was an average of 38.3% women directors reported, a meaningful 2.2 percentage point increase from mid-year 2022. This data is described in Figures 12.1 and 12.2.

*Percentages may not add to 100 due to rounding.

Women board representation by industry

As in previous years, the average number and percentage of women directors varied significantly across industries in this year’s data. Also consistent with previous years, on an industry-by-industry basis, there continues to be varying degrees of growth in 2023 compared to 2022. These changes are illustrated in Figures 13.1 and 13.2.

For mid-year 2023, we observed some change in the rankings of the different industries. The Utilities & Pipelines industry consistently has the highest average percentage of women directors and the highest average number of women directors. There was some improvement in the Mining and Technology sectors this year. However, the Mining, Energy Services and Life Sciences industries continue to have the lowest proportion of women directors.

The number of women directors and average percentage of women directors generally increased overall, although the Forest Products & Paper sector experienced some regression.

New director appointments

In 2023, women were added to boards at a higher rate than ever. We monitor the progress TSX-listed companies are making in adding women to their boards, whether they are being nominated for election as new directors for the first time in 2023, including where they were appointed during the year to fill a vacancy that occurred since the last shareholders’ meeting or as a result of an increase in board size at the relevant company. For the 658 companies that fully or partially satisfied the Diversity Disclosure Requirement, 532 board seats became available due to vacancies or an increase in board size. Women were nominated to fill 241 board seats, or 45.3% of the total number of newly created or vacated board seats. This represents an increase of 1.7 percentage points compared to 43.6% at mid-year 2022 and builds on a 4.5 percentage point increase observed between mid-year 2021 and mid-year 2022.

The rate at which women were added to boards of S&P/TSX 60 companies was lower than the average above and lower than last year, however, as women were nominated to fill 39.4% of the newly created or vacated board seats (44.7% at mid-year 2022) of such companies. Given the higher representation of women on the boards of S&P/TSX 60 companies, this result is likely a consequence of the companies having made gender representation a primary focus in prior years. It is possible that it may signal a shift in focus towards improving board diversity beyond gender. For meetings held on or after February 1, 2024, ISS announced its decision to generally recommend voting against, or withholding from, the nominating committee chair at S&P/TSX Composite Index companies that have no apparent racially or ethnically diverse board members.

Board policies related to diversity and the identification and nomination of women directors

Overall, 650 companies reported on whether they adopted board diversity policies in 2023. Of these, 460 (representing 70.8%) disclosed that they have a written board diversity policy. This is essentially flat compared to the 70.7% of companies that reported having adopted such a policy in mid-year 2022. Among S&P/TSX 60 companies, 52 of the 56 companies reporting indicated that they had adopted a written board diversity policy – this represents 92.9% of all S&P/TSX 60 companies reporting and a slight increase from the 88.9% reported in 2022.

The Diversity Disclosure Requirement seeks disclosure on whether the board has adopted a written policy that specifically relates to the identification and nomination of women directors. Not all companies disclosing that they had adopted a written board diversity policy stated whether the policy specifically related to the identification and nomination of women directors, and some companies specifically disclosed that they did not. In 2023, 650 companies disclosed whether or not they had a written policy related to the identification and nomination of women directors, and 423 (65.1%) of these companies indicated that they had such a policy. This represents a slight increase of 0.8 percentage points compared to the 64.3% reported at mid-year 2022. This change is illustrated in Figure 15.

Among S&P/TSX 60 companies, 56 companies specifically disclosed whether they had a written policy related to the identification and nomination of women directors and 51 (91.1%) stated that they had adopted such a written policy. S&P/TSX Composite Index companies adopted such policies at a rate similar to the S&P/TSX 60 companies, with 90.0% of companies disclosing that they have a written policy for the identification and nomination of women directors. It is noteworthy that only 52.4% of companies outside the S&P/TSX Composite Index providing disclosure indicated that they had adopted a written policy of this type.

The disclosure from companies reporting that they have adopted a board diversity policy indicates that a broad range of diversity characteristics are considered. Of these specific diversity characteristics, it is unsurprising that gender is referenced most frequently.

For mid-year 2023, we saw a sustained high level of companies indicating that their board diversity policies reflected the diversity characteristics identified in the CBCA Requirement – visible minorities, Indigenous peoples and persons with a disability. Age, skills/expertise, geography and LGBTQ2S+ were also frequently cited.

Figure 16 is a list of the top five diversity characteristics – other than gender – identified by companies in order of the frequency with which they are cited.

Companies that have not adopted a written policy with respect to the identification and nomination of women directors are required to explain why. Although 2023 is the ninth year the Diversity Disclosure Requirement has been in effect, over one-fifth of companies disclosing that they had not adopted such a policy still did not disclose the reason why they had not done so. Among those companies that disclosed a reason for not adopting such a policy, the most common reason given by a significant margin was the concern that doing so would compromise their focus on merit, consistent with our findings in prior years. The top five reasons for not adopting policies are listed in Figure 17 in the order of the frequency with which they occurred.

Targets for women on boards

For mid-year 2023, 278 (or 44.6%) of the 623 companies disclosing whether or not they had adopted a target for the representation of women on the board reported that they had adopted such a target (up from 41.4% in mid-year 2022 and 32.3% in mid-year 2021). Among the 56 S&P/TSX 60 companies that disclosed whether or not they had a target, 46 companies (82.1%) reported having a target. This represents a further increase from 2022, when 79.6% of S&P/TSX 60 companies reported having targets. These increases are likely a result of the continued impact of updated voting guidelines among institutional shareholders and proxy advisory firms which require the adoption of targets by issuers where the board is not comprised of at least 30% women.

Among the 278 companies that have adopted targets for women directors, almost two-thirds (66.9%) have adopted a target of 30%, reflecting both the fact that women hold almost 30% of all board seats among TSX-listed companies and the impact of institutional investor voting policies. The next most frequent targets for women directors were, in order, 40%, 33% and 25%.

Among those companies that reported not adopting targets, the reasons were generally similar to those given for failing to adopt written policies for the identification and nomination of female directors, with the vast majority indicating concerns about compromising their focus on merit or having concerns that a target may result in someone other than the most qualified candidate having to be selected. Other reasons included that adequate systems were already in place, that targets are ineffective or arbitrary or that targets did not suit the stage of development or nature of the business. The top five most commonly disclosed reasons are listed in Figure 19.

Women board chairs and committee chairs

Women in board chair roles

There was a slight increase in the proportion of boards where the board chair is a woman. Among the 658 companies providing full or partial diversity disclosure, we found 53 companies (or 8.1%) where a woman serves in the board chair role, compared to 49 companies (7.4% of those fully or partially disclosing) at mid-year 2022.

Women in committee chair roles

Women continue to take on board committee leadership roles.

We found that, at 417 of the 658 companies which provided full or partial diversity disclosure, at least one woman was serving as the chair of a standing committee of the board. This now represents 63.4% of these companies, up from 59.6% of these companies last year. This year, 274 companies (41.6%) reported having one woman committee chair (an increase of 0.6 percentage points from 2022), while 143 companies (21.7%) reported having more than one woman serving as a committee chair (an increase of 2.9 percentage points from 2022). This translates to an average number of women serving as committee chairs at all companies of 0.89 per company, which is effectively flat as against the 0.81 women committee chairs per company reported last year.

There was a modest increase in the number of women who chair audit committees compared to last year’s results. Of the companies providing full or partial diversity disclosure, at 182 companies (27.7%), the audit committee chair is a woman, representing a 1.3 percentage point increase from mid-year 2022.

Since the number of committees varies by issuer and the identity of committee chairs is not required disclosure, in some instances the information was not readily identifiable. However, our results suggest that the number of women assuming board leadership roles continues to steadily increase.

Voluntary disclosure of other diversity characteristics

A number of TSX-listed companies which are not CBCA corporations chose to provide voluntary supplemental disclosure regarding the representation of visible minorities, Indigenous peoples and persons with a disability on the board. We have highlighted the number of companies which chose to do so in Chapter 6.

This year we also noted a marked increase in the number of companies providing voluntary disclosure with respect to members of their board who were members of the LGBTQ2S+ communities.

---

Mid-year results for 2023: Women in executive officer positions

Number and percentage of women in executive officer positions

In 2023, 557 companies disclosed the number of women holding executive officer positions in the organization. These companies reported a total of 1,108 executive officer positions held by women. On average, these companies reported 1.99 women executive officer positions per company, while the 568 companies disclosing the percentage of women in executive officer positions reported that an average of 20.8% of their executive officer positions are held by women. These numbers reflect a slight year-over-year increase in the average number of women executive officers (up from 1.94 women executive officers last year) and a solid increase in the average percentage of executive officer positions held by women (compared to 19.8% in 2022).

The vast majority of management teams include at least one woman. The percentage of companies with all male executive teams remained relatively flat year-over-year with 28.5% of companies reporting that they had no women executive officers (compared to 28.6% in mid-year 2022). Companies that had only one woman serving as an executive officer have added more women executive officers. The percentage of companies that reported having only one woman executive officer declined from 28.8% at mid-year 2022 to 26.9%, while the percentage that reported having two or more women executive officers increased by 1.9 percentage points in 2023 to 44.5% (from 42.6% in 2022). These results are described in more detail in Figures 21, 22.1 and 22.2.

*Percentages may not add to 100 due to rounding.

*Percentages may not add to 100 due to rounding.

Progress in the executive officer ranks at S&P/TSX 60 companies was mixed for women in 2023. Among the 48 S&P/TSX 60 companies that reported on the number of women executive officers, the average number of women executive officers remained essentially flat year-over-year (3.54 at mid-year 2023 compared to 3.63 at mid-year 2022) while, among those disclosing the average percentage of women executive officers, the average percentage of executive officers who are women increased by 2.5 percentage points to 26.8%.

Though the average number of women executive officers remained flat among the S&P/TSX 60 companies disclosing at mid-year 2023 relative to those disclosing last year, we observed positive movement at the margins. As summarized in Figure 24.1, there was an increase in the number of S&P/TSX 60 companies reporting having at least four women executive officers and a decline in the number with no women executive officers. The results summarized in Figure 24.2 illustrate that, for the S&P/TSX 60 companies that provided disclosure, the percentage of women executive officers is increasingly skewed towards 15% or above.

Women executive officers by industry

Broken down by industry, the highest average number of women executive officers continued to be found in the Utilities & Pipelines sector, followed by Communication & Media and Financial Services.

Communication & Media, Utilities & Pipelines and Real Estate represented this year’s top performers in terms of the average percentage of women executive officers. The Oil & Gas, Clean Technology and Energy Services industries, on the other hand, had the lowest average percentage of women executive officers. Oil & Gas is also among the industries with the lowest average number of women executive officers.

It is difficult to make relative assessments of performance between most industries, however, as there is a wide variation in the number of executive officers per company between industries and a wide variation in the number of reporting issuers within each industry which impacts the relative sensitivity of each industry to change in averages. This could explain, for example, why in the Real Estate industry the average number of female executive officers is close to the overall average, but women represent a relatively high percentage of the executive officers.

Considering the representation of women in appointing executive officers

In 2023, 603 companies disclosed whether or not they take into account the representation of women in the identification and appointment of executive officers. Of those, 503 (83.4%) stated they do so. This number increased by 0.4 percentage points compared to mid-year 2022.

The proportion of S&P/TSX 60 companies reporting that they take gender into account when making executive appointments is flat relative to 2022 – so far this year, 51 (94.4%) of the companies that have provided this disclosure report doing so.

As with the adoption of policies relating to the consideration of women for director positions, the primary reason given for not specifically considering gender in the identification and appointment of executive officers relates to an expressed concern about compromising a focus on merit. This is consistent with the results in prior years. The three most common reasons for not considering gender in 2023 are listed in Figure 28. These three responses account for the vast majority of the reasons given for not considering gender in the identification and appointment of executive officers, though a significant minority (21.0%) of companies that disclosed that they do not consider gender in the identification and appointment of executive officers did not provide a specific reason for failing to do so.

Targets for women executive officers

This year, of the 559 companies disclosing whether or not they have a target to women executive officers, 64 companies (11.4%) disclosed that they did. This is essentially flat compared to 11.9% at mid-year 2022 and reflects the much lower level of interest demonstrated by companies in adopting targets for executive officers compared to the board level.

The number of S&P/TSX 60 companies adopting targets for women in executive officer positions rose slightly, with 12 of 47 companies (25.5%) disclosing whether or not they had adopted such a target indicating that they had done so.

In our review, we noted that some companies disclosed having adopted a target for women employees based on a group other than “executive officers” as defined under securities laws. These companies are generally not included in our totals because they are not responsive to the form requirement and apply to a broader group of officers and employees at the company. There are also a limited number of other companies that adopt targets for “designated groups” that may or may not include women.

Among those companies adopting executive officer targets, the most common target adopted was 30% women executive officers, followed by 25% and 20%.