When it comes to putting women in management and on boards, there are companies that are leaders, and there are companies that are laggards. And for several years, the companies that trailed the pack often had a rather noxious explanation: It was all about “meritocracy.”
Sounds good on the surface. But diversity advocates have long recognized the argument as an excuse for dude-dominated boards. The companies that nattered on the most about the philosophy of “merit” put it into practice by shutting out women from helping make their most important decisions.
The good news is that a number of the offenders have realized that both their practices and their language need to evolve, and as they’ve added women to leadership, they’ve struck the word “meritocracy” from their messages to shareholders. There is always bad news, though: The explanation is still being used, particularly by companies that haven’t managed to find more than one woman – or even one at all – to sit on their boards.
The genesis of today’s column was a 2017 opinion piece in The Globe and Mail by professors Aaron Dhir and Sarah Kaplan about boardroom gender diversity. They noted that one company with no women on its board explained it thusly: “The board will not compromise the principles of a meritocracy by imposing … targets regarding the representation of women on the board.”
In true Canadian fashion, the professors were too polite to identify the company, so I went to Google to identify the offender. But I found not one but many companies using the exact same loaded phrase about why they didn’t want to set targets or quotas.
I, however, am not polite, and it’s always been my goal to name names. And with the passage of time, my informal study has revealed which companies have now backed off from the language – and which are sticking to the script.
Canadian companies began addressing the issue of gender diversity in earnest in the spring of 2015, when Canadian securities regulators forced them to do it. Under the “comply or explain” policy, companies had to disclose their representation policies or targets, or explain why they had none.
According to my search of the database of Canadian corporate filings, nearly two dozen companies, nearly all in the Alberta oil patch, filed proxy circulars that first year that used the “compromise the principles of meritocracy” phrase.
It’s almost as if a bunch of corporate lawyers gathered in a conference room in early 2015 and set pen to paper for a unified response. Securities filings aren’t bestselling novels – no one will get sued for plagiarism if they rip off someone else’s turn of phrase, and companies apparently borrow language they like rather frequently. But how all these companies arrived at the same stirring defence of meritocracy may remain a mystery, because few of the companies that survive today – 11 of them – answered my question about how the language came to appear in their filings.
PraireSky Royalty Ltd. used the language from 2015 – when women directors represented 20 per cent of the board – until 2018. It struck it in 2019 as it adopted a board diversity policy and set a target of 25-per-cent female directors by 2021, a target it has now met.
In a written response, chief operating officer Cam Proctor said PrairieSky did not use an external consultant for the language. Mr. Proctor said that as PrairieSky has grown since its 2014 founding, “the board has similarly evolved to include ... a gender balance that is more reflective of our broader organization.”
Tourmaline Oil Corp., Black Diamond Group Ltd., Whitecap Resources Inc., Mullen Group Ltd. and Peyto Exploration & Development Corp. had all-male boards in 2015, when they first talked about compromising the principles of meritocracy. Alaris Equity Partners Income Trust had one woman. All dropped that specific language from 2017 to 2021, and all but Peyto now have at least two women on the board, or 20 per cent to 33 per cent of the members. Representatives of Black Diamond, Whitecap and Alaris responded to my questions with their thoughts on diversity, while Tourmaline and Mullen didn’t reply to e-mails.
Peyto’s only woman director represents 14 per cent of its board. In an interview, Peyto chief executive officer Darren Gee said the company doesn’t want to make its board larger because it has industry-leading cost controls and is proud of its anti-discrimination policy.
“It doesn’t serve anyone’s purpose to pick an inferior person for a position just because a certain race or gender is represented,” Mr. Gee said. “When you’re looking for the right people with the right qualifications, there should be no other criteria. There shouldn’t be any discrimination against anybody.”
Perpetual Energy Inc. is an outlier: It had two women on its board in 2015, good for 25 per cent, but now, after removing the language, has one woman on a five-person board.
Three companies of the 11 still use the “compromise the principles” language: Advantage Energy Ltd., Magellan Aerospace Corp. and Gear Energy Ltd. These companies had one or no women on their boards in 2015; all now have just one woman on their seven-member boards. At Advantage, the proportion of women has actually fallen since 2015, as the board has gotten larger. None of the three responded to my queries.
And then there are those that looked at this language and decided to pick it up after its debut. A quick search of contemporary usage found Persta Resources Inc. and Canacol Energy Ltd., both headquartered in Calgary, using it this year, with Persta adopting it in 2019. Neither company has a woman on its board, and neither company replied to my queries.
Perhaps they all think the language speaks for itself. The evidence confirms it – companies that are still emphasizing “meritocracy” are perpetuating corporate men-ocracy, which leads to mediocrity.
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