The Women@Work column appears weekly in The Globe and Mail.
Several years ago, my son came home from school and started lecturing my husband and I on our driving habits. His class’s emphasis on environmental initiatives meant that each student was asked to examine their carbon footprint and our son received demerit points for driving to school. The exercise intrigued me since it taught these children that believing in a strong, social initiative sounds good but it must translate into results. We walk to school now.
As adults, perhaps it’s easy to forget how actions speak louder than words and this week’s Board Games report in the Globe and Mail reminded me just how many words we’ve uttered on this topic of gender diversity in the boardroom.
Although the Board Games analysis marks its 10th year, progress remains “glacial”, with 41 per cent of companies on the S&P/TSX index still without a single woman on their board. Not one.
Despite this, and years of hand ringing over board diversity, we cannot reach a general consensus on how to properly tackle the issue in this country. Our current solution appears to be to talk about it but I worry that the mere conversation about women on boards has become been mistaken for progress.
Right now, the same arguments keep getting recycled but with little momentum. The strongest one comes down to the impact of diversity on corporate performance and it’s been almost 9 years since the Catalysts study showed that greater gender diversity at the top translates into higher returns for shareholders. The underlying premise is that a variety of opinions and perspectives lead to better boardroom discussions, positively impacting the bottom line.
Various solutions exists for this issue, the most extreme being legislated quotas, which continues to be a hard sell in Canada…for now.
“No one wakes up in the morning and thinks ‘I want a quota,’” quipped Lucy Marcus, CEO of London-based Marcus Venture Consulting and the host of In the Boardroom with Lucy Marcus. Ms. Marcus argues that the impetus behind the proposed EU legislation played an important role by drawing attention to the rationale behind diversity. In the EU’s case, the mere debate, she argued, instigated change.
“Now that this conversation is happening and people are taking it seriously, companies and indeed countries must be seen to be making real progress, as it is not an issue that can be ignored. What is at stake is too important – it is about building strong economies and strong companies,” she added.
The threat of quotas as a vehicle for a wider discussion on boardroom diversity has yet to take hold in Canada, largely since legislation is viewed as a remote possibility.
“I don’t think it’s the Canadian way,” said Spencer Lanthier, a corporate director and a 2011 ICD (Institute of Corporate Directors) fellowship award recipient about government-mandated quotas. He agrees that constantly talking about women’s representation on boards, without establishing any concrete solutions, remains unsatisfactory and suggests companies should embrace an “achieve or explain” approach. If the governance community in Canada embraced this tactic, few companies would relish going on the record to explain their lack of female representation.
The key to the approach relies on a commitment to proper recruitment. He recounts his time at the TSX, where recruiters were specifically asked to only source female candidates for two vacant board seats.
For those still arguing that this approach would bring unqualified candidates to the table, consider the landmark Davies Report in the UK that showed that only 4 percent of board directors in 2011 participated in a formal interview. What would the percentage be in Canada if we ran a similar poll?
But perhaps this worry that talk about gender diversity has substituted action remains a harsh assessment and we shouldn’t neglect to mention signs of progress. For example, 12 companies signed the Catalyst Accord, an initiative by the nonprofit group calling for top Canadian companies to ensure 25 percent of their board members are women by 2017.
Additionally, the Canadian Board Diversity Council released its first list of 50 board-ready men and women, vetted by leading Canadian CEOs.
“Never before has there been this much interest in board diversity with so many stakeholders weighing in to say now is the time for action,” observed Pamela Jeffrey, founder of the Canadian Board Diversity Council, referencing not only her organization’s initiative but the Federal government’s announcement during the last budget that they will create an advisory council to tackle the issue.
“I daresay Canadian boards are almost at the tipping point,” she added.
Let’s hope she’s right because there are still voices out there encouraging a “wait and see” approach, such as Inmet Mining chairman David Beatty who suggested checking back in 5 years. Unfortunately, that mindset contributed to this “glacial” progress. If we continue to talk, and concrete progress isn’t made in the coming years, the calls for legislation will only become louder.