Yahoo Finance Women make up 36% of board directors in Canada, on pace to reach parity before 2030: CIBC
More than one-third of board directors at S&P/TSX Composite-listed companies are women, according to a CIBC analysis, with gender parity on track to be reached before the end of this decade.
A CIBC Capital Markets research report released on Monday says that 36 per cent of TSX (^GSPTSE) company board members as of 2023 are female, an improvement from a decade ago when women made up less than 10 per cent of Canadian boards. That's slightly more than the S&P 500, in which 33 per cent of all board members are female.
While the boards of TSX-listed firms still fall short of gender parity, CIBC equity markets director Shaz Merwat wrote in the research report that "at the current rate of improvement, we expect Canada to reach gender parity at the board level before the end of this decade." In 2017, when CIBC first published the report on gender diversity among TSX companies, almost half of all sectors had not crossed 20 per cent threshold. Between 2008 and 2012, 40 per cent of TSX companies still had all-male boards, four times that of the S&P 500 at the time.
"We believe it is worth noting that Canada has taken big strides to improve gender diversity at the board level," Merwat wrote, noting that there are no more all-male boards on the TSX.
While women have made some gains in TSX boardrooms, a separate report from the Canadian Chamber of Commerce found that although women occupy nearly half (48 per cent) of total employment in Canada, just 35 per cent occupy management positions. Based on current trends, the Chamber says women will not reach equal representation until 2129.
"Women in Canada face not one glass ceiling but several, and not one broken rung in the promotion ladder but many—all of which hinder their ascent to full equality," Marwa Abdou, senior research director of the Chamber of Commerce's Business Data Lab, said in a statement.
"The data show that barriers for women persist most prominently in management positions and in boardrooms."
No sector on the TSX has reached gender parity on the board level, and CIBC says 10 of the 11 sectors on the TSX have at least one in three female board directors. The utilities sector leads the way across sectors when it comes to female representation, with 41 per cent of board directors being female (up from 16 per cent in 2012), while financials and consumer staples had 40 per cent and 39 per cent, respectively (up from 19 per cent in 2012 for both).
Healthcare is the only TSX sector where less than one-third of board directors are women. In 2023, 28 per cent of board directors were female, compared to 19 per cent in 2012. However, CIBC notes that the sector is a small representation of the overall TSX index.
CIBC also says its analysis "continues to suggest equities with higher levels of gender representation at the board level outperform on a total return perspective." CIBC compared companies with above-average gender diversity and below-average gender diversity relative to the broader index. The companies with above-average diversity had a compound annual growth rate that was 320 basis points above those with below-average diversity between 2008 and 2023. When comparing sector-specific companies, CIBC notes that the results are less conclusive, but that "we do not believe this in of itself disproves the positive impact on total returns from more diverse boards."
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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