In a recently published report by OSLER, titled “Planning for 2015: A 2014 Canadian Proxy Season Retrospective,” gender diversity on boards and in senior management is acknowledged as a long standing concern.
Among Canada’s 500 largest companies, the report indicates that board seats held by women sits at just 15.9%. While there have been improvements to communication, recruitment and media interest in the subject, progress over time has been “slow.” For example, in 2011, the percentage of women directors among Canada’s public company’s was 10.3% and by 2012, the percentage was 12.2%. The OSLER report acknowledges that there is much room for further improvement, “as 41.7% of Canada’s public companies did not have any female directors.”
Did you know that significant social and economic changes in recent years have resulted in studies that demonstrate that boards that are gender diverse produce better financial results than those with a lower percentage of women directors? The report goes on to state that “capitalizing on such studies, in July 2014, Barclays Bank PLC launched a series of exchange traded notes which track performance in an index comprised of U.S.-based listed companies that have a female CEO and/or at least 25% female members on the board and meet market capitalization and trading volume thresholds.” It appears that many regulators are watching these developments and are taking steps to encourage change.
There also appears to be a global trend that proactively encourages the recruitment of women to senior positions in public/private companies and on boards. The OSLER report cites a number of countries, such as the United States and the United Kingdom, that are strategic about recruiting for gender diversity. They are required to establish and openly describe diversity policy, including gender, and how such policy is implemented and measured for its effectiveness, including disclosure of specific policy objectives and how they are achieved. Australia goes even further, requiring companies listed on the ASX “to disclose their governance practices against corporate governance principles that recommend that companies: establish and disclose a summary of a diversity policy, including a requirement for the board to establish measurable objectives for achieving gender diversity; disclose annually the objectives established and progress towards achieving them; and, disclose annually the proportion of female employees in the entire organization, senior executive positions and women directors on the board.”
Other countries have chosen to take legislative and regulatory steps that require a minimum standard for gender diversity on boards. This can range from requiring one female board member to having 50% of the board who are female. Regulatory developments in Canada at the Federal level and in Quebec are also encouraging. “In a June 2014, the Federal government published a report by the Government of Canada’s Advisory Council for Promoting Women On Boards, presented to the Minister of Status of Women, that recommended:
- Boards should aspire to 30% female directors over the 2014-2019 time frame, with a long term goal of gender balance.
- Publicly traded companies should adhere to a “comply or explain” disclosure obligation in their published annual reports and move to adopting two and five year goals within a board renewal plan.
- Gender balance on boards should be a priority and advanced through policies, human resources practices and board recruitment and nomination committees.”
In Quebec, legislation requires that 50% of Quebec Crown corporation board seats be held by women.
Here is a list of nine Canadian companies that have adopted proportional targets for gender balance on their boards:
- 25% – Cameco Corporation, Emera Incorporated, Royal Bank of Canada and Telus Corporation
- 30-33% – Bank of Montreal, Canadian Real Estate Investment Trust and Cineplex Inc.
- 50% – Cominar Real Estate Investment Trust and Dream Unlimited
While we are making progress in Canada, the OSLER report suggests that we have not made the kind of progress reflected in Quebec or in other parts of the world. It appears that we have been slower to regulate and set standards for diversity and gender balance on boards and in companies. There is also a greater leadership role and responsibility for Federal, Provincial and local governments to advance diversity and gender policies and practices within their own organizations.
We also know that women are under-represented in local, provincial and federal elections, both as candidates and as elected representatives. I have found in my own experience as a candidate and local government representative, that the political culture is not necessarily “gender neutral or friendly.” Traditional power structures and political networks, dominated largely by men, pose real and perceived barriers for women, regardless of age, status and experience. Based on a competitive rather than a cooperative model, the contemporary political process is challenging for many women. The notion of political power is not necessarily one of “shared leadership” but has more often evolved from the “command and control” leadership model, not always compatible with how women have been socialized. Many women I know who have been successful in politics have had to “reach up” rather than “reach out,” to gain the kind of momentum that propels their candidacy to a successful conclusion.
The OSLER report is a strong reminder about how important it is that women and men together, continue to advance the goals of diversity and gender equity, not only in boardrooms but also across the spectrum of decision-making and leadership environments.