Royal bank of Canada has appointed Kathleen Taylor as head of its board, making her the woman to head a major bank in Canada.

Royal Bank of Canada has appointed Kathleen Taylor as head of the board, making her the first woman to head a major bank in Canada.

The move comes at a time when a number of leading Canadian companies have faced widespread criticism for their lack of gender diversity at board level.

Taylor will become the next chair, following the retirement of current chair David O’Brien, at the end of this year.

She has been a director on the RBC board since 2001. During this time, she has largely focused on the audit, risk and human resources committees and since 2010 she has led the human resources committee.

Taylor is also the former president and chief executive officer of Four Seasons Hotels and Resorts, where she served in a variety of progressively senior leadership roles.

O’Brien has been an independent director since 1996 and has served as chair since 2004. He will remain as director until the bank’s next annual meeting in Feb 2014.

According to a report released earlier this year called Get On Board Corporate Canada by TD Economics, Canada has fallen behind in the international rankings when it comes to the representation of women on boards.

The report said that women make up only 11 per cent of directors for firms at the largest publicly traded Canadian companies.

"This has a number of implications. First, it is simply an unacceptable outcome on equity grounds. Second, and more troubling to economists, it implies a market failure to appreciate the skills and perspectives that women can bring to the table," the report said.

To increase diversity in boardrooms and improve Canada's performance, the report recommends enhancing corporate governance practices to require publicly listed companies in the S&P/TSX Composite Index to disclose women’s representation among board and senior executive members. It also said that boards should convey to shareholders how gender diversity is taken into consideration in selecting new board nominees.

The Canadian government is also looking for ways to increase the pace of creating more diverse boards. In April this year, Rona Ambrose, the federal minister for Public Works and Government Services and minister for Status of Women, announced that the federal government was creating an advisory council to promote the participation of women on public and private corporate boards.

"Increasing opportunities for women to serve on corporate boards makes good business sense for Canadian women and for Canada's economy. Businesses with more women on their boards are more profitable and routinely outperform those with fewer. The role of the advisory council will be to advise our government on how industry can increase women's representation on corporate boards," said Ambrose.