National Post (National Edition)
Canadian firms still fall short in female board representation.
RAISING THE BAR ON FEMALE CORPORATE REPRESENTATION
Tanya van Biesen graduated with a bachelor of commerce from Queen's University in 1999 feeling “like nothing would hold me back.”
Her bold plan was to move to Cincinnati and become Proctor & Gamble Co.'s chief executive. “That was not only what I thought I would do or might do, but certainly what I thought I could do.”
Over time, however, the gender gap in business was clear and undeniable, van Biesen said.
Despite all the attention paid to the lack of women in the C-suite, they continue to be under-represented at the upper echelons of Canadian companies and on corporate boards.
“We really believe this is not a supply problem,” said van Biesen, who is now executive director of Catalyst Canada, a non-profit organization working to accelerate progress for women.
“And that there are really tremendous women out there ... really great talent out there to draw from. We believe that setting targets and holding everyone accountable to those targets is a really effective way to go.”
Women occupy 12 per cent of the total board seats in a sample of 677 companies collected by provincial securities regulators and released in September.
That's slightly up from 11 per cent a year earlier.
But after nearly two years of rules requiring companies to track their progress on boosting gender diversity under the “comply or explain” regime, corporate Canada has fallen short of the 30-per-cent representation advocacy groups have been aiming for.
Companies that set targets, however, tend to have women make up 25 per cent of the board, compared to 10 per cent for firms without targets, securities regulators’ statistics showed.
Perhaps that’s why the Liberal government in September proposed Bill C-25, which would require publicly traded companies to declare the gender composition of their boards and senior management, as well as outline their diversity policies, or explain why there are none.
Economic Development Minister Navdeep Bains said in October the government would consider imposing specific targets if the needle doesn’t move.
“In a few years, if we don’t see progress — in a few years, if we don’t see meaningful results — then we will re-evaluate our position and look at all other options at that time,” Bains said, according to The Canadian Press.
Van Biesen said Canadian companies are making strides, but slowly and not all equally.
The top 100 companies, by market capitalization on the S&P/TSX in Canada, are making “very consistent and positive progress,” she said, and now average 25-per-cent female representation on their boards compared to 15 per cent in 2011.
Several professional services organizations, such as law firms and accounting firms, are at 33 per cent and above, she adds.
But smaller and mid-size companies, and certain extractive industries, are struggling.
To tackle this, van Biesen wants companies to adopt targets and push the broader discussion beyond why companies need women on their boards — studies show that companies with female representation have better bottom lines — to practical advice on how to hire and help women reach the uppermost ranks.
She stops short of calling for quotas — a number imposed upon companies by the government, rather than a voluntary target set by the company — for now, because she said management is likelier to embrace gender diversity more wholeheartedly if it isn’t forced on them.
Targets work, Van Biesen said, pointing to the Catalyst Accord, launched in 2014, in which her organization called for Canadian companies to publicly sign on and commit to increasing the percentage of women on their boards to 25 per cent by 2017.
“These companies took it seriously, made their names publicly known and went after it,” she said.
Among the 30 signatories, which include Goldcorp Inc., BMO Financial Group and Air Canada, 75 per cent met the threshold, van Biesen said. Almost one-quarter of the signatories have 40-percent female representation on their boards.
“If we don’t see continued momentum ... Then we would certainly consider more stringent regulations,” she said.
Until then, van Biesen recommends that companies set targets and impose either term limits or age limits on board members to spur more board renewal.
“That will create more opportunities to appoint new directors, which is good for governance regardless of whether it’s a man or a woman, but also create more board opportunities for women,” she said.
As well, she adds, the existing “comply or explain” rules, which require companies to either increase female representation or explain why not, can be tightened. Companies often say they appoint “the most qualified people to the board” and that they were ”unable to find any qualified women,” she said.
“If you define merit as only ever having been a CEO, then that’s a problem ... that’s the narrowest definition of merit. Merit is in the eye of the beholder,” van Biesen said.
Firms should examine the composition of their board to identify which skills, experience, geographic representation they really need to accomplish their goals, as well as making sure there is broad diversity.
For example, some companies want to put only chief executives or chief financial officers on their boards, narrowing the available pool to a degree that it becomes difficult to find women, Van Biesen said.
“Do you need 13 CEOs? Or would one or two CEOs be great, plus financial expertise, plus executive compensation expertise? Then you can build a much more diverse board and look at different candidate pools in which to find those board members,” she said.
Catalyst will be relaunching the Accord next year, raising the female-representation bar on boards above 25 per cent for companies that sign on, she said.
Van Biesen is hopeful that these changes will make a real difference for the next generation of women.
“It’s our responsibility to make sure that it’s better in a country like Canada, that is diverse. And I think it will be increasingly diverse from a gender, race and ethnicity perspective,” she said. “It is our responsibility that we break down these barriers.”