March 23, 2011

The place of women on board

Yvan Allaire | IGOPP

In 2010, 14.4% of board members of the 100 largest Canadian publicly listed corporations were women. During the year 2010, roughly 7% of these board members were replaced and for one in five cases by a woman. (Source: Spencer, Stuart, Corporate Board Report, 2010).

Even to a patient, passive observer, it is clear that the rate of change for the participation of women on corporate boards is glacially slow. There are two ways of accelerating the rate of progress of women on board:

  • The French way, that is, by a law establishing quotas to be met by all publicly listed corporations (as well as large private companies!). In January 2011, the French government enacted a law obliging companies to meet a quota of 20% of women on their board by 2014 and 40% by 2017 (The percentage of women on the boards of the 120 most important French companies was 11.4% in 2010). Any appointment to the board of a company which contravenes these obligations when those quotas become effective will be declared void and null; board members will not receive any board meeting fees until the situation is corrected.
  • The British way, that is, set up a commission to come up with reasonable objectives and to urge, or shame, corporations into making firm commitments to specific targets within a given time-frame. Thus, in February 2011, a task force created by the British government and chaired by Lord Davies of Abersoch submitted its report calling on British corporations to set a firm target of 25% of women on their boards by 2015.(The percentage of women on the boards of targeted British corporations was 12.5% in 2010).

The first avenue runs the risk of triggering perceptions of affirmative action, a most damaging consequence for the whole effort of getting women to take a substantial place on boards. But the most troubling aspect of this issue is that a fundamental variable is never brought into the discussion: the turnover rate of board membership. The Spencer Stuart report for 2010 shows that there were some 87 new members out of 1150 members on boards of the 100 largest corporations, or a rate slightly above 7%. […] Read more