Black female boss leading corporate multiracial team meeting talking to diverse businesspeople, african american woman executive discussing project plan at group multi-ethnic briefing in boardroom

Large publicly traded companies are appointing more women to their boards — but the same can’t be said for smaller companies.

According to a joint report from non-profit group Catalyst and the 30% Club, women make up 27.6% of the boards of directors of companies in the S&P/TSX Composite Index, up significantly from 18.3% in 2015.

But for companies listed on the TSX as a whole, the percentage of women on boards drops to 19.4%, suggesting that small- and mid-cap companies are not keeping pace with larger ones as society moves toward greater gender diversity at the highest ranks of corporate oversight.

“The largest Canadian companies are leading the pack to accelerate progress for women on boards,” the report stated. “Companies of all sizes across the TSX continue to have much work to do for women on boards.”

The gender diversity gap between firms of different sizes exists for a number of reasons, according to Andrew MacDougall, who leads the corporate governance practice at Osler, Hoskin & Harcourt LLP.

Larger companies tend to have “bigger boards,” MacDougall noted. That makes it a bit easier to expand the board — and also means there is a greater chance of someone leaving the board, creating an opportunity for a female candidate.

“As you get down to the smaller companies, of course, there’s less turnover,” MacDougall said.

Institutional investors, MacDougall noted, first began scrutinizing all-male boards of companies listed on the S&P/TSX Composite. But now, groups like Institutional Shareholder Services have turned their attention to the entire TSX.

In January, new legislation came into effect under the Canadian Business Corporations Act requiring public companies to provide greater disclosure on the number of women, visible minorities, Indigenous peoples and people with disabilities in executive and board roles.

“We are only eight months into that legislation coming into force. Over the next couple of years, we’ll start to see [more] companies reporting,” said Tanya van Biesen, Catalyst’s executive director, Canada.

Shilpa Tiwari, the founder of Her Climb, an initiative that advocates for Black, Indigenous and women of colour (BIWOC) leaders, said she’s concerned that recent efforts to improve gender diversity on boards may leave BIWOC women slipping through the cracks.

“It does make me nervous because I don’t think [these efforts] actually benefit women of colour,” Tiwari said.

Tiwari added there’s no reason why companies in large cities shouldn’t be able to find BIWOC women to serve on their boards.

“When you’re in a city like Toronto, I can’t believe when you say: ‘We can’t find them,’” she said. “That’s not a problem of candidates or [the talent] pool — that’s a problem of you not looking.”