Britain rejected quotas following the 2011 recommendations of a high profile government-backed task force headed by Lord Davies of Abersoch.
The Davies report instead recommended Britain’s top 100 companies voluntarily aim to reach a target of 25-per-cent women by 2015, and proposed companies should have to disclose their diversity plans annually to shareholders. Those disclosure requirements were adopted and legislated this year. Between 2011 and 2012, the proportion of women on FTSE 100 boards climbed to 15.6 per cent from 12.5 per cent.
In the March federal budget, Canada’s Conservative government included a brief mention that it was planning to create a committee of business executives who could be advisers on promoting women’s participation on corporate boards.
But committee membership has still not been announced, and there is no indication it will prepare reform recommendations.
The only significant effort at legislative reform in Canada has come from Liberal Senator Céline Hervieux-Payette who has tabled a private member’s Senate bill that would require corporate boards to have 40-per-cent female directors. “We’re supporting women on boards because they would be bringing something to the performance of the company,” Ms. Hervieux-Payette argues. “It’s not charity, and it’s not a right. It is, in fact, an intelligent decision so that the company does better.”
Her legislation has not won the support of the Conservative government, however, and has not been embraced by many in the private sector, with critics either opposing the mandatory quotas it proposes, or simply arguing there is little point in championing an opposition private member’s bill with little chance of being adopted.
Royal Bank of Canada director David Denison, who previously headed the Canada Pension Plan Investment Board, says he does not support the proposed quotas in the Senate bill, and says there should instead be a “consultative process of stepping back and saying, ‘Is there an alternative way to advance this issue?’ ”
For his part, Mr. Denison favours rules that would require more disclosure of diversity practices to encourage change. “Over and over again, where you see this issue around clear disclosure and companies having to explain what it is they do – whatever their practice is – it does influence the outcome, no question around it,” he said.
Even if the value is never mathematically proved, corporate director Mary Mogford, who is on the board of Potash Corp. of Saskatchewan, says she is convinced board discussions are better when there is diversity at the table. “Based on 20-plus years in many different boardrooms across more than 20 different boards, I believe that diversity in all its forms creates a richer, more productive environment for board discussion and decision-making,” she says. “The cause and effect may not be there in measurable terms – I just believe in it instinctively.”
Many corporate directors say the time has now come to debate ideas for reform. News earlier this month that the EU Commission has drafted a bill requiring 40-per-cent quotas for boards in all member countries is further evidence that legislative action is a less radical idea than it once was.
Kathleen Sendall, a Calgary-based corporate director who is on the board of CGGVeritas in France, says the status quo has been “a pretty strong immovable force.” Her experience with quotas on a French board, meanwhile, has been very positive. “If you had asked me this question three years ago, I would have said, ‘Absolutely not’ [to quotas] … But I’m not as positive about that any more, because I see a lot of those women who aren’t making their way on to boards.”
Nevertheless, she still favours a less stringent approach to start.
Norwegian director Liv Monica Stubholt, a former Norwegian deputy minister of energy, says she was not a fan of the quota idea when it was first introduced in Norway, but has changed her views in the decade since, after seeing boards find enough qualified women. Opposition to the rule has been all but silenced, she adds.
Indeed, Ms. Stubholt, now a senior vice-president of strategy and communications at Kvaerner ASA, believes the quota law could even be rescinded and firms would likely keep a similar proportion of women because of a widespread belief the diversity has improved boards.
Leslie Rahl, a New York-based financial executive who sits on the board of CIBC and founded a New York chapter of private networking group Broads on Boards, says she has always hated the idea of “quotas for anything.” But more recently, she says she has concluded change will open happen if there is some form of regulatory pressure on companies. “It’s not going to happen organically,” she says. “It’s not going to really happen until there is some form of exogenous stimulus. But hopefully it will be something that even if it behaves like a quota, they’ll find another name for it.”