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HEC Montréal and the Ordre des CGA emphasize the importance of diversity in governance

February 24, 2012

At a conference organized by HEC Montréal and the Ordre des CGA du Québec, Claude Francoeur, holder of the Professorship in Strategic Financial Information – CGA, and Nathalie Francisci, 

CRHA, Chair of the Institute of Corporate Directors – Quebec Chapter, have presented the latest research findings and discussed the benefits of more diversity on boards of directors. The packed event brought together researchers, governance experts and business people eager to learn more about diversity in governance and, in particular, the representation of women on boards of directors.

“Current governance reforms are aimed at achieving a greater diversity of opinions, and women have an important role to play in contributing to this kind of diversity,” noted Claude Francoeur. “Unfortunately, publicly owned corporations in Canada have a very low proportion of women on their boards, 10.3% on average, and 42% of Canadian companies have no women at all on their boards,” he added.

Studies conducted by the research group on diversity in governance at HEC Montréal have shown that diversified boards of directors and management teams have a positive impact on the quality of businesses’ strategic decisions and their financial performance. Of the 300 companies studied over a three-year period, those with a large proportion of women in senior management were 6% more profitable than what was expected by the stock market.

Some countries, such as Norway, have opted to impose quotas to boost the number of women on boards of directors, whereas other countries prefer to rely on incentives or, as in Canada, not to intervene and let the market sort it out. “Although our studies conclude that there is an optimal level of diversity above which boards of directors are more effective, the critical mass of women isn’t necessarily the same for all companies,” explained Professor Francœur. “The solution may lie in a collaborative approach by which all stakeholders (the state, investors, companies, academics, etc.) co-operate to achieve greater demographic diversity on boards of directors and in the senior management of publicly owned companies,” he concluded.

About the Professorship in Strategic Financial Information – CGA

The Professorship in Strategic Financial Information – CGA, the result of a partnership agreement with the Ordre des CGA du Québec, is intended to encourage and promote research in the field of professional accounting expertise. Claude Francœur, an Associate Professor with the Department of Accounting Studies, has held the Professorship since it was created in 2008. His research relates to the fields of governance, ethics, quality of financial information, international standards and financial performance.


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