1、In 2021,boards of TSX 60 companies once again appointed a record number of directors and made progress increasing the representation of BIPOC.Board MonitorCanada 2022CEO&Board PracticeThanks to the following Heidrick&Struggles colleagues for their contributions to this report:Nancie LatailleTorontoL

2、aryssa Topolnytsky,PhD TorontoAbout the reportThis report is part of Heidrick&Struggles long-standing study of trends in board composition in countries around the world.Produced by our CEO&Board Practice,these reports track and analyze trends in nonexecutive director appointments to the boards of th

3、e largest publicly listed companies in Australia(ASX 200),Belgium(BEL 20),Brazil(B3),Canada(TSX 60),Denmark(OMX Copenhagen 25),Finland(OMX Helsinki 25),France(CAC 40),Germany(DAX and MDAX),Hong Kong(Hang Seng),Ireland(ISEQ),Italy(FTSE MIB),Mexico(BMV IPC),the Netherlands(AEX),New Zealand(NZX 10),Nor

4、way(OBX),Portugal(PSI 20),Saudi Arabia(Tadawul),Singapore(STI 30),South Africa(JSE Top 40),Spain(IBEX 35),Sweden(OMX 30),Switzerland(SMI Expanded),the United Arab Emirates(ADX and DFM),the United Kingdom(FTSE 350),and the United States(Fortune 500).Information about executives is gathered from publi

5、cly available sources,BoardEx,and a Heidrick&Struggles proprietary database.Introduction4How are boards stepping up to meet the moment and prepare for this more demanding future?8Looking forward 15The terms of engagement between companies and the international community-at-large have changed 7Key fi

6、ndings5Welcome to Board Monitor Canada 2022HEIDRICK&STRUGGLES3 IntroductionAs society and business are reconciling the events of the past two years and a new license to operate is taking shape for corporations,there is a marked need for boards to understand what changes they need to make in both the

7、 near term and long term to lead their organizations successfully and ensure they can continue to operate effectively.In many countries around the world,there is also a very clear expectation that companies will take a stand on social and political issues.1 A clear example of this has been organizat

8、ions responses to the ongoing war in Ukraine:many companies made the decision to leave the Russian market and sacrifice their profit and operations for the greater good.Perhaps even more pronounced are the expectations from a wide range of stakeholders who,more and more,are demanding that companies

9、act in a sustainable manner.But have boards moved the dial when it comes to changing their composition to tackle these new expectations and mitigate the risk of losing their license to operate?Our analysis of the board appointments made in 2021 in TSX 60 companies suggests that,in Canada,they haveso

10、mewhat.BOARD MONITOR CANADA 20224 1 Edelman Trust Barometer 2022,Edelman,January 2022,.Although there has been progress in broadening the spectrum of experience around boardroom tables in TSX 60 companies,organizations need to ensure they are not only prepared for todays challenges but can anticipat

11、e what type of directors they need to appoint in order to future-proof their organizations.To learn more about how Canadas leading companies are doing this,we spoke with 25 board members of those leading companies across industries to understand what they view as todays most pressing challenges,how

12、board composition is changing,and how it should change going forward.Key findingsIn 2021,boards once again appointed 68 directorsthe current record.The share of seats allocated to Black people,Indigenous people,or people of color(BIPOC)increased from 9%in 2020 to 40%in 2021.(The highest shares of se

13、ats went to people of Asian descent,followed by people of Black or African descent.)The share of seats going to women in 2021 increased to 46%,up from a rather significant dip to 38%in 2020.68202138%9%40%46%202020202021HEIDRICK&STRUGGLES5 111117616New seats filledAverage age68Snapshot of 2021 findin

14、gsDistribution of industry experience,by board industry(%)Note:Numbers may not sum to 100%,because of rounding.60ConsumerIndustrialHealthcare&life sciencesBusiness servicesFinancial servicesOtherConsumerFinancial servicesHealthcare&life sciencesIndustrialTechnology&telecomsInternationalSocial media/

15、digitalFinancial risk/complianceSustainabilityDE&I CybersecurityOther previous experience(%)0242118133C-level previous experience(%)CEOCFOCOODeputy CEOOther C-level467463 24397Technology&telecomsBOARD MONITOR CANADA 20226 Current or former CEO experience46

16、%Current or former CFO experience13%Gender balance(%)5446WomenMenActive vs.retired executives(%)5644RetiredActiveNationality(%)National:Non-national:5438N/A:7Experience(%)First-time public board experience:Previous public board experience:1981Ethnicity(%)WhiteAsian or Asian descentBlack or African d

17、escentIndigenousHispanic/LatinoMiddle Eastern601812441Note:Numbers may not sum to 100%,because of rounding.Note:Numbers may not sum to 100%,because of rounding.Nice-to-haves are becoming mission critical for corporate governance(and leadership)As the new license to operate for businesses is evolving

18、 to include consideration of sustainable growth,ensuring companies protect the communities within which they operate while still making profits,what does it mean for Canadian companies and boards?The directors we spoke with emphasized the need,especially in uncertain times,for this mix of sustainabi

19、lity,growth,and profitability as well as the need for finding the right talent and navigating diversity,equity,and inclusion imperatives.Yet,in a time when companies are expected to step up on these types of issues,some directors expressed regret at the lack of Canadian business representation as a

20、strong influencing voice on the global stage.Globally,environmental,social,and governance(ESG)is becoming a strategic driver for businesses and increasingly instrumental in corporate access to capital.Sustainability,particularly in terms of mitigating the dangers of climate change,is becoming increa

21、singly regulated around the globe.In Canada,boards see ESG as a major focus and a significant risk,and see the lack of guidance and standardization of key metrics as a critical hurdle that makes it difficult to understand their progress and communicate it to stakeholders.And there are other risks de

22、rived from the new expectations from stakeholders:the increasing role of the corporation in solving societal issues needs to be reflected in the way leaders manage their own companies,in areas such as the approach to talent,adoption of new technologies,direct and indirect sustainability impact,and t

23、he emergence of increasing accountability for leaders.Not walking the talk in their own organizations can alienate employees,customers,investors,community members,and other stakeholders.It also adds to other,more established disadvantages some Canadian companies deal with when competing for talent.T

24、he board members we spoke to most often focused on talenton the difficulty of making competitive offers for top talent in Canada(compared to US companies,for instance,that can offer higher packages in a lower tax regime)as well as the difficulty of dealing with the impact the events of the last two

25、and a half years have had on the mental health and engagement of entire workforces.And diversity,equity,and inclusion(DE&I)is a continuous work in progress,fairness and equity are becoming central to its narrative.In Canada,there is strong pressure for boards to show leadership diversity when it com

26、es to visible minoritieswomen and ethnic minorities,particularly Indigenous peopleand on a wider spectrum of age,one that includes younger directors.Here,too,board members indicate that more guidance is necessary to overcome a general sense of confusion about what boards are expected to do when it c

27、omes to DE&I.The terms of engagement between companies and the community-at-large have changed HEIDRICK&STRUGGLES7 They are infusing new perspectives In 2021,boards once again appointed 68 directorsthe current record.The share of seats that went to directors who were active rather than retired saw a

28、 steep increase in 2021,reaching 56%,compared to 41%in 2020.After three relentlessly turbulent years,boards seem to find value in more executives who have first-hand experience of navigating uncertainty.How are boards stepping up to meet the moment and prepare for an uncertain,and more demanding,fut

29、ure?Number of board seats filled,20182021Active executives,20182021(%)63200206820220202141404156BOARD MONITOR CANADA 20228 We saw a dip in the share of seats going to first-time public board directors in 2021,perhaps in response to the high levels of uncertainty on the horizon

30、and the comfort boards feel in recruiting more experienced directorsthose who have typically faced similar economic and geopolitical challenges in the past.A higher share of first-time directors were women,54%,while only 46%of experienced public board directors were women.In terms of ethnic diversit

31、y,Hispanic/Latino directors were more often first-time directors,but,notably,none of the first-time directors are Indigenous people.Whats different between first-time directorsand their more experienced peers(%)Share of first-time public board members,20182021(%)Experienced public board directorsFir

32、st-time public board directorsShare of seatsDiversityWomenAsian or Asian descentBlack or African descentIndigenousHispanic/LatinoExperienceCEOCFO Other C-levelInternationalSocial media/digitalSustainability Cybersecurity82720000652002119291032HEIDRICK&STRU

33、GGLES9 CEOCFOProfessional experience The share of seats going to directors with CEO experience continued on its upward trajectory after a dip in 2019,and its notable that the increase in 2021 comes from the new women appointees.The share of seats going to directors with CFO experience continues to d

34、ecrease,and hit the lowest share since 2018.2002202021CEO and CFO trends,20182021(%)MenMenOverallOverallWomenWomen50725249593442771912451313BOARD MONITOR CANADA 202210 The share of seats going to directors with same-industry experience increased compared t

35、o 2020,as did the share of seats going to directors with cross-industry experience.Only 7%of 2021 appointments went to directors with HR experience,all of them women.Given the increased scope and importance of HR-related challenges over the past couple of years,it is not surprising that boards neede

36、d more of this type of experience.However,directors told us that many boards are still reluctant to add people with specific,non-traditional expertise in many areas,as opposed to generalists;boards often feel they can rely on the companys HR leaders for this counsel.Looking at other professional exp

37、erience,we saw an increase in the share of seats going to directors with digital and sustainability experience and a significant decrease in financial risk&compliance expertise.Shifts in industry experience,2020 vs.2021(%)OverallConsumerFinancial servicesHealthcare&life SciencesIndustrialTechnology&

38、telecomsOverallConsumerFinancial servicesHealthcare&life SciencesIndustrialTechnology&telecomsCross-industry experience,by board industry 687859828068596383505863877333254564408020202021Same-industry experience,by board industry2020202202021How areas of expertise evolved in new director a

39、ppointments,20182021(%)DigitalFinancial risk&complianceCybersecuritySustainability2634206600HEIDRICK&STRUGGLES11 Gender trends,new female appointees,20182021(%)A step forward for gender balance The share of seats going to women in 2021 increased to 46%,up from a rather signific

40、ant dip to 38%in 2020but still behind the record 52%in 2019.There are great variations among sectors:financial services companies saw 59%of their seats going to women,while consumer companies saw only 13%go to women.On the whole,women bring similar C-level experience to the boardroom as do their mal

41、e colleagues,including CEO backgrounds,which makes Canadian companies an outlier:in most of the markets for which we track board appointments,women significantly less often have CEO experience.This similarity in profiles between the men and women likely means that,in Canada,the pipeline of female le

42、aders with substantial executive experience is now pretty much on par with that of their male peers.Its also notable that the group of new female directors appointed in 2021 included significantly higher shares of ethnically diverse people compared to the men.Indeed,52%of women appointed were direct

43、ors of an ethnicity other than white;only 30%of men were BIPOC.2002146383252Gender of new appointees,by industry(%)OverallConsumerFinancial servicesHealthcare&life sciencesIndustrialTechnology&telecoms5050673341595446MenWomen876486191359.6Whats different between the previous ex

44、perience of men and women(%)MenWomenShare of seatsDiversityWhiteAsian or Asian descentBlack or African descentIndigenousHispanic/LatinoExperienceCEOCFOCOOOther C-levelInternationalFinancial risk&complianceDigital/social mediaSustainabilityOther demographics ActiveAverage age(years)5470491

45、66230271460.621613Note:Numbers may not sum to 100%,because of rounding.BOARD MONITOR CANADA 202212 6044337374765213Big strides in ethnic diversity The biggest progress in terms of diversity was a marked increase in the share of seats filled by directors of BIPOC ethn

46、icitiesincreasing from 9%in 2020 to 40%in 2021.Among them,4%of seats went to Indigenous directors,up from none in 2020.There are some notable differences in ethnic diversity by industry:although financial services and industrial organizations have appointed directors from a wide range of racial and

47、ethnic backgrounds,that is not the case in all industries.WhiteOverall people of colorAsian or Asian descent Black or African descentIndigenousHispanic/LatinoOther minority ethnicity9812441Ethnicity,new appointees,2020 vs.2021(%)20202021000Ethnic diversity of new appointees,by industry,20

48、21(%)Black or African descentHispanic/LatinoMiddle EasternWhiteAsian or Asian descentIndigenousOverallConsumerFinancial servicesHealthcare&life sciencesIndustrialTechnology&telecomsEthnicity,new appointees,women vs.men(%)WhitePeople of color overallAsian or Asian descent Black or African

49、descentIndigenousHispanic/LatinoMiddle EasternMenWomen4870523031HEIDRICK&STRUGGLES13 7Nationality Fifty-four percent of the new director appointments went to Canadians,compared to 63%in 2020.In 2021,26%of seats went to US nationals.Age diversityThe average age of newly appointed directors

50、 was 60,with 73%of seats going to directors over 55 and only 5%to those under 45.The average age of new Canadian directors is the second highest in the markets we study,after Singapore,where the average age is 63.Age trends,20182021,and age breakdown,2021Average age of new appointees,20182021Age dis

51、tribution of new appointments,2021(%)Under 45 4549.95054.95559.96064.96569.970 or older55002138754Nationality,new appointees(%)NationalCanadianUnited States AmericansOtherN/ANon-nationalN/A542612Note:Numbers may not sum to 100%,because of rounding.Note:Numbers may not sum to 10

52、0%,because of rounding.60.759.959.660.1BOARD MONITOR CANADA 202214 Looking forward for Canadian boards As the contract between companies and society is changing,it is necessary for boards to be both fit for purpose today and able to manage future unexpected,yet inevitable,crises.Companies require a

53、newer,bolder type of leadership that includes a focus on organizational purpose,factors in the new demands from their workforce,and has“doing good while doing well”as a mantra.Canadian directors told us that there have been significant changes in the way boards approach their own succession:historic

54、ally,as in many countries,many boards focused on adding retired CEOs of large companies,lawyers,financial services executives,and regulation experts,creating what some directors saw as an“old boys club.”The issue,as one of the directors put it,is that“even if you have five CEOs of different industri

55、es,you have a similar thought,going forward.”It is clear that a move away from this approach isnt only anecdotal:for example,in just four years,the share of seats on TSX 60 company boards going to directors with CEO experience has dropped from 59%to 46%.Other changes the directors highlighted were a

56、n increase in the numbers of seats going to younger CEOs and entrepreneurs and a new focus on leadership capabilities such as purpose,empathy,and inclusion,which are now taking equal importance to areas of hard expertise.This,as directors stressed,is because of the importance of building strong rela

57、tionships with the executive team,investors,and other stakeholder groups.Directors we spoke with were less aligned on the need for single-issue specialists.In one view,board decision-making on some of todays most pressing issues,such as sustainability,digital,talent,or DE&I,would clearly benefit fro

58、m directors with deep expertise in these issues.On the other hand,a concern persists that single-issue experts might lack the necessary experience to contribute fully to board decisions.In this context,the increase in board positions going to CHROs in 2021 may highlight a positive trend of boards se

59、eking a mix of specific expertise in the context of overall strategic and operational knowledge,which is something we are encouraging boards around the world to explore.We noticed a similar ambivalence when it came to first-time directors:while many of the directors we spoke with highlighted the val

60、ue of bringing new directors onto boards,a few had questions about their readiness to be a fully participating board member.Our analysis suggests that this concern may be unfounded:although first-time directors less often have CEO or CFO experience,they do bring to the table experience in other C-su

61、ite roles,which helps bridge the gap in experience and help boards address the key issues their executive teams are grappling with.As our recommendations below suggest,boards are addressing such concerns by dynamically considering all the skills and capabilities they need to remain fit for purpose a

62、nd HEIDRICK&STRUGGLES15 Actively seeking new directors whose backgrounds combine a mix of traditional expertise,(such as CEO or CFO)with knowledge that is newer on boards skills matrix,such as digital,sustainability,or cybersecurity,as well as experience in areas such as HR or different industry bac

63、kgrounds.fit for the future,seeking the critical skills they need most,and finding ways to bring other voices into the boardroom.That means that they dont have to choose between experts and generalists,retired or active executives,or between more seasoned business leaders and younger leaders.So,what

64、 are best-in-class boards doing?They are:Staying tightly focused on diversity beyond gender.Best-in-class boards are building their networks and improving their outreach to potential directors from diverse ethnic backgrounds.While the share of women on Canadian boards has increased from 17.2%in 2018

65、 to 23.8%in 2021,2 the Canadian figures are still trailing the majority of the markets we study.In parallel,considerations of diversity are now expanding beyond gender to include members of visible minorities,such as Indigenous people and persons with disabilities.As we noted,in 2021,Canadian boards

66、 made strides on both together:52%of women appointed were directors of an ethnicity other than white,and 30%of men were of an ethnicity other than white.Looking further ahead,we encourage boards to start thinking about diversity beyond visible characteristics,including representation from LGBTQ2+com

67、munities,people from a range of socioeconomic backgrounds,and neuro-diverse talent.Increasing the share of directors who are in active executive roles.While there is no doubting the value that seasoned executives bring to the table,there is an increased understanding that those in active roles,often

68、 first-time directors,are playing an increasingly important role in bringing current perspectives and information into decision makingthus building more resilience in board processes.This acknowledgment is reflected in the increase of seats going to directors who are in active roles:56%in 2021,compa

69、red to 41%in 2020.Bolstering their sustainability acumen.The lack of progress in bringing more sustainability experience to boards is particularly concerning in a context in which we heard an increasing sense of urgency surrounding climate change,and sustainability in general.There is a clear need t

70、o increase the level of fluency boards have on the topic:a survey of board members Heidrick&Struggles conducted in collaboration with INSEAD last year found that that 85%of respondents believed that the level of overall climate knowledge on their boards needed to increase.3 And,while we saw progress

71、 in 2021,with 13%of director seats going to people with sustainability expertise,up from 3%in 2020,more boards could benefit from a knowledgeable voice in the boardroom on the subject of climate change and its impacts.BOARD MONITOR CANADA 202216 2 TMX Group,“Sector analysis of board diversity on Tor

72、onto Stock Exchange listed companies,”Toronto Stock Exchange,August 19,2022,.3 Changing the Climate in the Boardroom,Heidrick&Struggles and the INSEAD Corporate Governance Centre,.That said,there is no single prescription for board composition.Each company is in a different stage of maturity,in diff

73、erent industries and locations,and pursuing unique strategies.And,while some have weathered the past couple of years successfully,others have more to rebuild.Each board should ensure its refreshment strategy reflects the organizations purpose and goals for the long term and prioritize efforts to add

74、 fresh perspectives where they will make the most difference.Seeking new members who have the ability to take on a leadership role,either that of a chair,senior independent director,or committee leader.The chair is central to determining what skills,backgrounds,and expertise are needed on a board,as

75、 well as to shaping a board culture that ensures all directors,old and new,can contribute effectively.More must be done to ensure that the particular mix of skills board chairs need is a key consideration in the selection process for every intake of new directors.And,for all board leadership roles,n

76、on-traditional leadership capabilities should come to the fore:boards should seek people who are good listeners and relationship builders,people who can lead through influence,and who connect with the organizational purpose.5 This matters more than ever because its crucial,especially now,for chairs

77、and directors to be able to collaborate across cultural or political differences as well as differences in expertise and backgroundnot by ignoring those differences but by using them as assets to solve problems.Thinking of succession planning as an ongoing exercise rather than an exercise undertaken

78、 in reaction to an annual deadline.A significant part of this process is proactively cultivating potential board members who can meet anticipated needs across different time horizons and strategic scenarios.This reduces risk and builds confidence that the organization will be led well,whatever happe

79、ns.Another important element of succession planning is regularly assessing the performance of boards and board members to make sure that the company has the most effective team around the table.4Bringing younger directors onto boards.The median age of directors appointed over the past few years has

80、been remarkably stable,and the average age of directors overall has increased slightly.Best-in-class boards understand the advantages of perspectives brought by executives who are in earlier stages of their careers and are,in many cases,closer to the intricacies and consequences of some of the newer

81、 issues boards need to address,such as climate change,digital,or the nuanced challenges facing todays multigenerational workforces.HEIDRICK&STRUGGLES17 4 For more on board refreshment,see Alice Breeden,Theodore L.Dysart,and David Hui,“Building the foundation for better board refreshment,”Heidrick&St

82、ruggles,.5 Alice Breeden and Bonnie W.Gwin,“The chair imperative:A new mandate for leading in a new world,”Heidrick&Struggles,.CEO&Board PracticeHeidrick&Struggles CEO&Board Practice has been built on our ability to execute top-level assignments and counsel CEOs and board members on the complex issu

83、es directly affecting their businesses.We pride ourselves on being our clients most trusted advisor and offer an integrated suite of services to help manage these challenges and their leadership assets.This ranges from the acquisition of talent through executive search to providing counsel in areas

84、that include succession planning,executive and board assessment,and board effectiveness reviews.Our CEO&Board Practice leverages our most accomplished search and leadership consulting professionals globally who understand the ever-transforming nature of leadership.This expertise,combined with in-dep

85、th industry,sector,and regional knowledge;differentiated research capabilities;and intellectual capital,enables us to provide sound global coverage for our clients.Leaders of Heidrick&Struggles CEO&Board PracticeBonnie Gwin New YLyndon A.Taylor CCarlos Vazquez Mexico City Jeffrey Sanders New YNancie

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