When it comes to putting women on company boards, Canada has two solitudes: the resource sector and everyone else.
Despite years of high-profile pressure to bolster the representation of women on boards – including new diversity disclosure rules from regulators taking effect Dec. 31 – Canada's resource companies remain far behind the curve. Women fill just 7.8 per cent of seats on the boards of energy companies in Canada and 11 per cent in mining and forestry firms.
In most other sectors – including financial services, utilities, telecommunications, health care and consumer staples – women now account for between 20 per cent and 25 per cent of corporate directors, a proportion that has been growing rapidly as companies respond to calls from regulators, shareholders and advocacy groups for greater diversity in senior roles.
Calgary-based corporate director Stella Thompson, a retired Petro-Canada executive, says the slow pace of improvement on board diversity in the energy sector is becoming an embarrassment for women in Alberta's oil patch.
"There are lots of capable women to help with boards," she says. "You don't necessarily have to be the CEO of an oil company – you need a few of those, but you don't need all of them."
Not all resource companies are dragging their feet, and some of the largest firms have made major strides to add multiple women to the boards. But they remain a minority, and the slow pace of change means the sector is falling behind as other industries move more quickly to embrace diversity.
A review of Canada's largest 251 companies in the S&P/TSX composite index as of Oct. 21 shows 55 per cent of energy companies have no women on their boards, and 42 per cent of mining and forestry companies have no women, compared with just 16 per cent of all other firms in the index.
Ms. Thompson believes no men in Calgary's tight-knit energy community are against the idea of diversity, but it has not become a priority for many, either.
They are accustomed to filling boards with colleagues who previously worked together or were joint-venture partners, or helped form start-up companies, she says. They often belong to the city's top three private clubs and even live in the same exclusive neighbourhoods in Calgary.
"There's trust and friendship, and it has worked well," she says. "Many of them have made lots of money. It's very comfortable and it's also very efficient for them, and there's no hassle – they've done this before they all know each other, and they just get together and move through whatever you have to do … So in their minds there's no need or desire to change."
Success stories in the resources sector, however, serve to highlight how much more can be done for those who make the effort.
Vancouver-based copper miner Turquoise Hill Resources Ltd., for example, has both a female CEO – Kay Priestly – and a female incoming board chair, Jill Gardiner. The company, which is controlled by global mining giant Rio Tinto PLC, currently has three women on its eight-member board, but will have two after Ms. Priestly retires at the end of this month.
"The practical reality is that it often takes an individual to really get behind finding women for these roles," says Ms. Gardiner, who credits Ms. Priestly for pushing to have gender diversity on the board.
Ms. Gardiner said it can be a "self-fulfilling prophecy" for resource companies to argue they have few women directors because there are few senior women executives in the sector. Instead, she says boards should look for women with other needed skills, such as finance or legal backgrounds, to "fill the gap" until more mining women are available.
"An environment seen to be supportive of women at the top will be, on balance, more attractive to other women, including the talented young women entering the work force today," she argues.
Diversity advocates agree that adding women in top roles also sends a powerful signal to employees and customers that a company cares about equality and a modern work environment.
Bev Briscoe, chair of the board of heavy equipment dealer Ritchie Bros. Auctioneers Inc. and a member of the Goldcorp Inc. board, says many mining companies have had other priorities as they struggle to survive in a period of low commodity prices, but are now facing strong regulatory and social pressures to become more diverse.
"I think companies that don't have women on their boards, that's the biggest shame on them," she says. "It's going to be hard over the next three years for a board to maintain the fact they don't have a woman on their board. What kind of employer are you? How progressive a thinker are you?"
Ms. Briscoe says there are clearly fewer women working in the resources sector than in area such as financial services, but this is not an excuse for inaction.
"I'm not sure there is a shortage of women. But it's not simple. I think you have to work a little harder in the resource sector – you have to go a little further."
She joined the Goldcorp board, for example, after spending her career in the transportation sector working with resource clients. She calls it a "dotted line" connection to mining industry.
On Friday, Vancouver-based miner Teck Resources Ltd. announced the appointment of two women to its board, both with financial services backgrounds.
With resource companies accounting for 48 per cent of all companies in Canada's composite index, their behaviour also has a large influence on Canada's overall track record.
A global review of diversity published in September by Institutional Shareholder Services Inc., for example, shows Canada lags most other major countries for women on boards – including the U.S., Britain, Australia, and most countries in western Europe – due largely to the dearth of women on resources boards.
Canada's largest institutional investors have not played a major role in pressuring companies to hire more women for their boards and are typically not linking their investment decisions to diversity. But the powerful Canadian Coalition for Good Governance, which represents most of Canada's largest institutional investors, is asking companies with no women what they are planning to do about it, says executive director Stephen Erlichman.
He has little sympathy for giving resource companies more time than other sectors to become more diverse.
"They just need to go beyond their current comfort level of friends or whatever, and I believe they will find them," Mr. Erlichman said.
Calgary-based corporate director Kathy Sendall, a former executive at Petro-Canada, has seen how much progress can be made when companies make a concerted effort to search for women.
Ms. Sendall was the only woman on the board of Paris-based geoscience company CGG, which serves the energy industry, when she joined in 2010. But the company later added three more female directors after France adopted quotas requiring companies to have 40 per cent women on their boards by 2017.
"One of my board colleagues said, 'It's amazing how many qualified women are out there when you're forced to look for them,'" Ms. Sendall recalls.
She said the experience of quotas helped convince many skeptics in France that there was no need to compromise on quality when companies recruited women.
"When you get into these discussions with some of these guys, there's this presumption of a dilution of quality – they presume that if they have to bring women onto their boards then somehow the quality of the directors sitting around the board table is going to be diluted," she said.
"And in fact you get some of these wonderful candidates who bring so much to the table, and they were blissfully unaware of them before."
Director Sarah Raiss, a former executive at TransCanada Corp. who now sits on four major corporate boards including Vermilion Energy Inc. and Canadian Oil Sands Ltd., says effective strategies for boards include creating targets for women, or pledging to choose a woman for every second or third board vacancy.
Boards with no immediate vacancies have temporarily increased their size to add one woman, she says, then have shrunk back when the next man is scheduled to retire.
They can also more broadly define the job requirements to find people beyond the resource sector, or hire search firms to search more broadly for people who aren't known to the board.
"A lot of people are starting to say, 'We can either be forced to do this, or we can take charge of it and do it the way we think is most effective for our company,'" she says. "Every single one of my Calgary boards – and they are all resource-based – are looking at diversity."
There are many signs of mounting progress in Canada's resources sector.
Data from director search firm Spencer Stuart shows women accounted for 12 per cent of new board appointments at mining companies between 2009 and 2011, but that proportion climbed to 42 per cent from 2012 to 2014.
The energy sector has remained steady with women accounting for 23 per cent of all new directors appointed in both time periods, which is the slowest pace of new intake of a major industry sector.
Over all, women filled 43 per cent of new board appointments in 2014 among Canada's 100 largest companies, a jump from 28 per cent in 2013 and three times higher than the rate in 2009, Spencer Stuart said.
"In mining specifically, we've had more inquires from that sector for diverse [board] candidates than ever before," says Spencer Stuart board recruiter Tanya van Biesen, who is responsible for overseeing searches for diversity candidates for boards.
The progress is especially rapid at Canada's 60 biggest companies, which have often been leaders in corporate governance practices. Only three companies in the S&P/TSX index had no women on their boards until recently, and two of them – Crescent Point Energy Corp. and Eldorado Gold Corp. – added a women to their boards in the past two months.
First Quantum Minerals Ltd. is now the only company remaining in the S&P/TSX 60 index with no women on its nine-member board. Company spokesman Brian Cattell said First Quantum "recognizes the benefits and importance of diversity" on boards and has been "actively" seeking a female director through a global search.
"Our practice, for proven effectiveness reasons, is to have a relatively small board," Mr. Cattell said. "This means that with normal rotation we only look for a new director every few years."
First Quantum added a new independent director to its board in each of 2012 and in 2013, but both were men.
Report on Business has examined the boards of directors of 247 companies and income trusts in the S&P/TSX composite index as of Sept. 1, 2014. Click here for a table assessing the quality of their governance practices.