The TD Economics report, titled "Get on Board Corporate Canada," says Canada is lagging behind other industrialized countries like Norway, Finland and Sweden when it comes to the number of women acting as directors for large publicly-listed companies.
The study found that women only make up 11 per cent of board members for firms on the S&P/TSX Composite Index, which represents more than 240 of Canada's largest companies by market capitalization.
Meanwhile, nearly half (43 per cent) of the companies on the index reported no female board member, and 28 per cent only have one.
Beata Caranci, deputy chief economist for TD Bank (TSX:TD) and author of the report, says the numbers don't add up.
"You're trying to get companies to consider the best possible candidate and statistically it does not make sense that we have such a low representation of women on boards considering their skill levels, their engagement in the workforce, their level of education," she said.
Nevertheless, the report warned against slapping hard quotas on companies to get more women into these high-profile positions.
"There is some sort of market failure so you need some bit of policy push, but the quotas may not achieve what you're trying to do," said Caranci.
"It may in numbers alone, but not in terms of spirit of the law."
She added that putting in place affirmative action policies run the risk of undermining the work and experience of women who are already working in the corporate world.
"You don't want to undermine the cause by making it look like well, we don't know if this person arrived at this position through merit or because the company needed to tick this box," said Caranci.
Instead, the report advocated for policies centred around awareness, transparency and measurability, like a requirement for public companies listed to report the number of female members on its board.
She said this would result in more accountability and may even aid in recruitment of talent if a potential candidate sees the diversity of a company's workforce.
The report also recommended, at a minimum, for shareholders to be informed of how a company is taking into account gender diversity when selecting new board members.
She said making these issues public can be "catalyst for change" and create a baseline to measure future progress.
"That's why you don't need a big stick to whack them with," said Caranci. "You allow for markets and moral persuasion to work for you."