The vast majority of Canadians – 85 per cent – now live in provinces governed by women. This is a remarkable transition from even a decade ago. Women are playing increasingly prominent roles not just in government but in law, medicine and academia in Canada, the U.S. and Western Europe.
Kathleen Wynne, the 59-year-old Premier of Ontario, is the latest leader to join the club of six female premiers. Their ranks include Nunavut Premier Eva Aariak, a 58-year-old grandmother, and B.C. Premier Christy Clark, 47, who recently observed that being a single mother is an asset in her job because it keeps her connected to everyday life. These leaders all prove that a high-impact career and motherhood can indeed be a winning combination.
Everywhere, it seems, change is in the air, with one glaring exception: corporate Canada. The pace of change when it comes to gender parity on corporate boards has been glacial. Women account for just 14.4 per cent of all 3,992 board seats at Canada’s 500 largest organizations, including publicly traded companies, Crown corporations and Canadian subsidiaries of large multinationals. That percentage has budged only a few points upwards over the last 10 years. Forty-one per cent of companies still have no women at all on their boards.
Champions of equality have made arguments about why it behooves corporations to add women to their ranks. A diverse board improves governance and stewardship. Women are more innovative and have an in-bred sense of skepticism. Companies with more female directors are more profitable.
The conventional wisdom has been, Don’t worry, the cream will rise to the top. However, this has not happened in the corporate world the way it has in politics. The sector has not self-corrected. The research, the measuring, the data, the arguments have failed to bring about change.
Across Europe, the trend has been to set targets or quotas to mandate the inclusion of more women in the public and private sectors. This has happened in Norway, Spain, France, Italy, Iceland and even Malaysia, which approved legislation in 2011 requiring corporations to have 30 per cent of women in “decision-making” roles by 2016. In Britain, a government committee issued a report two years ago calling on the largest public companies in the FTSE 100 index to strive for a target of 25 per cent women by 2015. It has had a real impact: between 2011 and 2012, the proportion of women grew to 15.6 per cent from 12.5 per cent.
Quebec legislated gender balance on the boards of its Crown corporations in 2006, and recently achieved it. Some influential voices say it is time for the rest of Canada to consider taking action, and at least setting soft internal targets or goals.
Guylaine Saucier, a former director of the Bank of Canada, says her experience in France, where she has helped to recruit talented, competent women for board roles, has made her realize the value of intentionally casting the net wider. “I would suspect we have as many good women in Canada as in France, we just have to look for them,” says Ms. Saucier. “Canada has a good governance culture. But there is the danger that we rest on our laurels. I hope we go on leading and innovating.”
Patrice Merrin, chairman of the board of CML Healthcare Inc., also believes that setting a concrete goal is the only way companies will achieve reform. “Trying to make intellectual arguments for getting women on boards is a time-waster,” she says. “The wealth that resides in public markets is so important and we want the best possible governance. I don’t think that deriving people from a very small, closed pool is the best way.”
Canada’s Crown corporations, as well as the banking and telecommunications sectors, are already much more representative, in part because they are governed by the federal Employment Equity Act, which encourages preferential hiring for women, the disabled, aboriginals and visible minorities.
At Toronto-Dominion Bank, women occupy one-third of executive and board positions. Colleen Johnston, TD’s chief financial officer, believes such diversity has helped the bank become more “powerful, flexible and sustainable.” Having senior leaders advocate for greater inclusion has helped drive the change, as well as ensuring all departments include diversity in their business strategies. One-third of executives at the Bank of Montreal and the Royal Bank of Canada are also women, while women occupy one quarter of executive roles at the Canadian Imperial Bank of Commerce.
Manulife Financial has also made strides. The insurance giant was an early signatory to the Catalyst Accord, a program by the advocacy organization that asks companies to aim for at least one-quarter of their corporate directors to be women by 2017. Manulife has now exceeded this goal. “You don’t find excellence just among men. You adapt your search process to also find excellent women leaders and that is what we have done,” said Gail Cook-Bennett, board chair.
Bringing greater rigour and transparency to board appointments helps break down the institutional barriers women face. Men are often backed by influential sponsors early in their careers who later call on them to sit on boards. A 2012 longitudinal Catalyst study tracked 1,660 MBA graduates from 26 business school in Canada, the U.S., Europe and Asia. It found that men were given more “game-changing” roles, with higher budgets and larger teams of employees, than their female counterparts, even when their level of ambition and education were the same.
But it is time to stop analysing the barriers to entry for women, and launch a different conversation. It is time to emulate the corporations where change has been achieved. A decade from now, if voluntary efforts have not worked, we should not be startled if the public demands more stringest action, perhaps even quotas. Canadian companies, so often considered a source of innovation and leadership, need to take a cue from voters and place trust in the vision and capacity of the entire educated workforce. It makes business sense.