While 73 per cent of corporate board members feel their boards are diverse, the reality is that women are significantly less likely than men to serve on corporate boards, according to the Canadian Board Diversity Council's (CBDC) 2011 report card.
"Directors whose boards have re-defined diversity believe they make better board decisions as a result of this diversity," said Pamela Jeffery, founder of CBDC. "That's because important, diverse perspectives on customers, international markets and stakeholders that were once missing are now being represented. This helps avoid groupthink and leads to better discussion and an improved ability for directors to carry out their director responsibilities and increase shareholder value."
The 2011 Annual Report Card, which surveyed 400 directors across the country, examines the representation of women on the boards of Canada's top 100 charities and Canada's 500 largest corporations as measured by assets in five sectors: utilities; finance and insurance; retail trade; manufacturing; and mining, quarrying, oil and gas.
Women hold the greatest percentage of corporate board seats (one in five) in the utilities; finance and insurance; and retail trade sectors. One in 10 hold board seats in the manufacturing sector and one in 15 hold board seats in mining, oil and gas sectors, found the study.
"Organizations with diverse boards are often better at innovation and decision making, which can enhance their competitiveness," said Anne Golden, president and CEO of the Conference Board of Canada.
An overwhelming majority of male and female board members say board diversity is an important issue. Still, 59 per cent of corporate board members continue to oppose the development or adoption of a formal diversity policy.
The council calls on boards to replace at least one of every three retiring directors with a director of a diverse background.
"With the large number of directors retiring over the next five years, now is the time for action," said Jeffery.
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