In Corporate Canada, women are woefully under-represented at the board level – a fact that flies in the face of common sense.
The arguments for inclusion are plenty – and the best argument is that it’s simply good business.
“As shareholders, we care because there is more and more empirical evidence that companies that elevate women to officer and director positions are more profitable,” says Deb Abbey, CEO, president and founder of Vancouver-based Real Assets Investment Management Inc. “And we’re seeing that across a number of different sectors.
“It’s just common sense. Women own 25 per cent of our businesses, they’re half of Canada’s workforce, and they represent 50 per cent of all customers in businesses.”
 |
| Deb Abbey |
However, statistics tell a different story when it comes to their representation in the boardroom. According to a survey released earlier this year, more than half of Canada’s largest public and private companies and Crown corporations – 51. 4 per cent – don’t have a woman at the boardroom table.
The survey conducted by Catalyst, a leading source on women in business, also showed that just 11.2 per cent of director positions at the country’s 500 largest organizations were held by women, up marginally from 9.8 per cent two years earlier.
On Nov. 16, Abbey and an impressive group of speakers and panelists will attend a half-day forum in Calgary designed to create interest and debate around the issue. The Sheldon M. Chumir Foundation for Ethics in Leadership is responsible for the event, one of a number of initiatives it’s offering in the corporate governance area concerning ethical practices.
Abbey, whose investment management firm focuses exclusively on social investment, says companies are slowly getting the message that diversity pays. It’s a case she’s personally delivering.
 |
| Patrick O'Callaghan |
In the past year, Real Assets has filed shareholder resolutions asking three Canadian technology companies to adopt policies addressing gender diversity among their officers and directors. The companies were Open Text, Aastra Technologies and Research in Motion.
All three companies denied having a problem “despite their conspicuous lack of women at the top,” Abbey says. And despite all three companies urging shareholders to vote against the resolution, shareholders showed an interest, especially at Open Text where it received 46 per cent of the vote.
“In this case, technology companies didn’t perceive it as an issue,” Abbey says. “I think they do now. A lot of shareholder campaigns start with only two or three or five per cent of the vote the first year. And then they bring the issue back again.”
Beverly Topping, a successful entrepreneur and president and CEO of the Institute of Corporate Directors (ICD), an association that represents Canadian directors, says a major barrier to women is the fact that most director candidates have been either successful retired CEOs, or CEOs of existing companies.
“We don’t have the same numbers of females in those segments, although that’s changing,” Topping says.
Like Abbey, Topping believes the business case for women serving on boards is elementary. “Eighty per cent of the purchasing decisions are made by women,” she says. “It’s just common sense that a board should be made up of men and women, and that corporations should really know their markets and be in touch with 80 per cent of the buying power.”
She, too, sees changes coming. This year the ICD’s directors education program, taught in partnership with the University of Toronto’s Rotman School of Business, boasts promising female representation. (The program will be taught this November at the U of C’s Haskayne School of Business.)
“We are educating that next generation of people who are the aspiring directors,” Topping says. “A third of our registrants across the board have been female.”
The program includes seasoned directors, CEOs and senior managers aspiring to boards. Importantly, women are networking and some men in the program are being “enlightened,” she says, realizing that “these women are extremely capable.”
Additionally, the ICD has set up a registry of people wanting to become directors. Topping has already had inquiries from corporations and headhunting firms looking specifically for female directors.
Topping and Abbey can point to numerous studies showing that women holding officer and board-level positions bring new perspectives to an organization, have strong consensus building skills, improve a company’s public image and boost the bottom line.
Nevertheless, Patrick O’Callaghan says the prospects for more women on boards aren’t encouraging.
As the managing partner of Vancouver-based O’Callaghan & Associates, he consults in the area of governance and effectiveness with boards across North America. His company also annually publishes, with Korn/Ferry International, Corporate Board Governance and Director Compensation in Canada, a review of the Top 300 largest companies in Canada.
“An early look at the stats (the report is issued in late November) regarding women on boards is not heart-warming,” he says.
“I’ve been doing this review for the last 10 years. Between 92 and 93 per cent of all directors are men . . . that statistic has not changed in 10 years.”
Within the Top 300, he notes that only five companies have more than four women on their boards of directors, a statistic he calls unbelievable.
While the classic candidates are retired or sitting CEOs, today’s workloads restrict the number of boards any one person can sit on, O’Callaghan says. Therefore, there is a need to find a new pool of candidates.
Asked why more women aren’t chosen, O’Callaghan doesn’t have an easy answer. A better way is to understand when and why women are selected, he says.
“When it does happen, it’s because there’s a champion. The CEO, the chair of the board or a leading director says, ‘We are going to have more women on this board.’ And they push to have it happen.”
O’Callaghan cites B.C. Premier Gordon Campbell as one such advocate. Campbell directed Elizabeth Watson to “absolutely ensure that there was strong female representation on all of the major Crown boards,” he says.
Watson is the managing director of board resourcing and development in the premier’s office, and, “as a consequence of that, there aren’t any major (B.C.) Crown corporation boards that don’t have three or four female directors,” O’Callaghan says.
“I’ve seen it in other boards, where the chair says, ‘I don’t care what you guys think, we are going to have one, two or three women on this board.’”
In those cases, the leaders who committed to making change understand the business case for women, genuinely believe the business case and are prepared to take a risk with some less obvious, high-potential candidates, O’Callaghan says.
“Ultimately it comes down to the business case,” he says. “And if they truly believe.”
* Note: Topping, O’Callaghan and Watson will join Abbey in speaking at the Calgary forum. For other speakers and details, see www.chumirethicsfoundation.ca.
Web watch:
(Mike Dempster can be reached at miked@businessedge.ca)
