Bi­ases hurt­ing com­pa­nies

“It’s very im­por­tant for or­ga­ni­za­tions to em­brace gen­der diversity”

The Guardian (Charlottetown) - - BUSINESS - BY JAMES RIS­DON SPE­CIAL TO THE CHRON­I­CLE HER­ALD

Un­con­scious bi­ases against women in the work­place are keep­ing many of them from tak­ing their right­ful places on cor­po­rate boards — and that’s hurt­ing com­pa­nies, says the chair­woman of 30% Club Canada’s steer­ing com­mit­tee.

“It is stereo­types and bi­ases,” said Dr. Beatrix Dart, who is also a pro­fes­sor of man­age­ment strat­egy at the Rot­man School of Man­age­ment at the Univer­sity of Toronto, in an in­ter­view.

“A woman may have just had a sec­ond child and the as­sump­tion will be made that she may not want to travel (for work) and she might not even be asked,” said Dart. “She may be thought to not be tough enough for the job.”

The 30% Club, which also has chap­ters in Aus­tralia, Hong Kong, the Mid­dle Eastern coun­tries of the Gulf Co­op­er­a­tion Coun­cil, Ire­land, Italy, Malaysia, South Africa, Turkey, the United King­dom and the United States, is work­ing to change those per­cep­tions.

The ad­vo­cacy or­ga­ni­za­tion wants to see 30 per cent of se­nior-level ex­ec­u­tive com­mit­tee po­si­tions and cor­po­rate board di­rec­tor­ships in Canada held by women by 2019.

Cer­tainly, the club counts heavy hit­ters among its ranks. Vic­tor Dodig, CIBC pres­i­dent and chief ex­ec­u­tive of­fi­cer, is the or­ga­ni­za­tion’s chair­man in Canada. Dodig shared his thoughts dur­ing an event at Saint Mary’s Univer­sity re­cently on how best to en­sure an equal rep­re­sen­ta­tion of men and women on cor­po­rate boards and in se­nior man­age­ment po­si­tions.

“It’s very im­por­tant for or­ga­ni­za­tions to em­brace gen­der diversity,” said Dodig in an in­ter­view. “Hav­ing a gen­der-di­verse team more ac­cu­rately re­flects the world we live in. When women are well rep­re­sented at all lev­els, you’re en­cour­ag­ing diversity of thought within the or­ga­ni­za­tion, im­prov­ing col­lab­o­ra­tion, cul­ti­vat­ing in­no­va­tion, build­ing stronger lead­er­ship and cre­at­ing over­all a much more suc­cess­ful busi­ness.”

Lydia Bug­den, chief ex­ec­u­tive of­fi­cer and man­ag­ing part­ner of the le­gal firm of Ste­wart McKelvey, is an­other strong sup­porter of the idea.

Al­though women com­prise about half of all law school grad­u­ates, Bug­den said many drop out of the pro­fes­sion early in their ca­reers. Among Ste­wart McKelvey’s com­ple­ment of lawyers, 33 per cent are women.

“By the time they make part­ner, only 25 per cent are women,” she said.

But Univer­sity of Toronto pro­fes­sor Jor­dan B. Peter­son dis­putes the sug­ges­tion that un­con­scious bias in the work­place is keep­ing women out of the na­tion’s board­rooms.

“We don’t know enough about un­con­scious bias, its de­gree or any­thing, to know how it ap­plies to dif­fer­ences in eq­uity out­comes,” said Peter­son.

“There’s no re­li­able test for un­con­scious bias.”

Women are just as ca­pa­ble as men when it comes to tak­ing on th­ese high-pres­sure po­si­tions but tend to make dif­fer­ent ca­reer choices, said Peter­son.

There is con­sid­er­able dis­pute over why, what it means and what should be done about it.

Ac­cord­ing to Bud­gen, it is widely rec­og­nized that women take more parental leave when chil­dren are born and that takes th­ese women out of the work­force for that pe­riod of time. “That leads to a com­pen­sa­tion gap,” she said. “You tend to get com­pen­sated based on your work . . . What that means is you have to come roar­ing back to work to get back to where you were.”

Day­cares will typ­i­cally not take in­fants un­der two months of age and that usu­ally forces one of the par­ents to stay home. Often, that par­ent is the mother.

“Women still do the ma­jor­ity of the care­giv­ing . . . There are a whole host of sys­temic is­sues,” said Bug­den. “As we al­low th­ese sys­temic is­sues to eat at our labour pool, we end up with far fewer can­di­dates at the higher lev­els.”

Ac­cord­ing to Dart, the Swedish model of re­quir­ing that both par­ents take parental leave has been a great equal­izer.

“There is no stigma for a man to take a parental leave there,” she said. “Here, we have an op­tional parental leave but for a man it is often ca­reer sui­cide.”

Ac­cord­ing to the 30% Club, women com­prise less than five per cent of chief ex­ec­u­tive of­fi­cers, less than 20 per cent of chief strat­egy ex­ecs, and only 19 per cent of board seats of the roughly 250 com­pa­nies in­cluded in the S&P/TSX Com­pos­ite In­dex.

There are many more women than that with the cre­den­tials to take their place in cor­po­rate board­rooms, said Dart.

At the In­sti­tute of Cor­po­rate Direc­tors, an or­ga­ni­za­tion which pro­vides ac­cred­i­ta­tion for board mem­bers, 31 per cent of the 3,794 grad­u­ates of that or­ga­ni­za­tion’s ac­cred­i­ta­tion pro­gram — or 1,179 — are women.

Even though there are un­doubt­edly many women who can serve on cor­po­rate boards, Peter­son said the per­cent­age of peo­ple who ac­tu­ally want to do this job for any con­sid­er­able length of time is mi­nus­cule. The ques­tion isn’t why there are so few women at the top of the ca­reer lad­der, but why there is any­one there at all, he said. “They don’t get much sleep. They aren’t in­ter­ested in leisure. They’re like ma­chines. And most of them hap­pen to be men.”

The 30% Club claims cor­po­rate boards with at least three women tend to have bet­ter eco­nomic per­for­mance.

That’s borne out by a study pub­lished in Fe­bru­ary last year — Is Gen­der Diversity Prof­itable? — with ev­i­dence from a global sur­vey which noted there is a cor­re­la­tion be­tween the num­ber of women com­pa­nies have on their boards and their bot­tom line.

“The re­sults sug­gest that the pres­ence of women on cor­po­rate boards and in the (most se­nior ex­ec­u­tive po­si­tions) may con­trib­ute to firm per­for­mance,” the re­port’s au­thors noted. “The im­pact is great­est for fe­male ex­ec­u­tive shares, fol­lowed by fe­male board shares; the pres­ence of fe­male CEOs has no no­tice­able ef­fect.

“The es­ti­mated mag­ni­tudes of th­ese cor­re­la­tions are not small: For prof­itable firms, a move from no fe­male lead­ers to 30 per cent rep­re­sen­ta­tion is as­so­ci­ated with a 15 per cent in­crease in the net rev­enue mar­gin,” states the re­port.

De­spite this con­clu­sion, that same re­port also notes other re­searchers have had dif­fer­ent re­sults. A 2011 study of Ger­man com­pa­nies found no re­la­tion­ship be­tween fe­male board mem­ber­ship and, for ex­am­ple, stock per­for­mance. An­other study of 2,000 firms found no ev­i­dence that adding women to boards en­hances cor­po­rate per­for­mance.

At the 30% Club, Dart is sat­is­fied with the stud­ies show­ing a pos­i­tive cor­re­la­tion be­tween more women on cor­po­rate boards and eco­nomic per­for­mance.

“I have not seen a study where you can con­clu­sively show causal­ity be­cause it is far too com­plex an is­sue,” she said. “There are too many fac­tors and vari­ables. It is im­pos­si­ble to do.”

But the lack of such a con­clu­sive study should not de­ter busi­ness­peo­ple from tak­ing ac­tion, said Dart.

“Most busi­ness de­ci­sions are made based on cor­re­la­tion and not cau­sa­tion,” she said. “There are con­tra­dic­tory stud­ies on just about ev­ery sub­ject that mat­ters.”

SUB­MIT­TED PHOTO

From left, Deanna Sev­ereyns chief fi­nan­cial of­fi­cer; Lydia Bug­den, CEO and man­ag­ing part­ner; and Su­san Hayes, chief pro­fes­sional re­sources of­fi­cer, make up Ste­wart McKelvey’s fe­male man­age­ment team.

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