The founder of Canada's largest networking group for female executives is launching the first search firm with an exclusive focus on finding women for boards of directors, promising a new fee structure to shake up the traditional search market.
Pamela Jeffery, founder of the 17,500-member Women's Executive Network, says she is creating Pamela Jeffery Search after spending two years talking to boards about gender diversity and hearing complaints about their difficulties finding top-tier female executives to serve as directors.
Ms. Jeffery said the complaints have been upsetting because she has met many qualified women through her networking association.
"We have a cadre of women in this country who are board ready, but who aren't visible … I know them. And I've already started working with boards drawing on that network," she said.
She said her new firm will only do director searches, and will not join the competitive market for executive searches. She argues some larger executive search firms see director searches as a sideline business because they earn far less money from them, so they do not invest the time to do them.
"Boards tell me that when they go to executive search firms, they're not seeing new women candidates – they're seeing candidates who already sit on boards. They have multiple board appointments and they're at an age where they aren't necessarily taking on more."
Moreover, Ms. Jeffery said she has heard complaints about the fee model used by some firms for director searches. Some charge a flat fee of around $80,000 to prepare a list of candidates for a director search, and are paid whether or not the board ultimately decides to select anyone they recommend. Ms. Jeffery says there should be incentives in the model.
Her firm will charge $28,000 to find a shortlist of candidates who are available to join the board, and a further $10,000 if the client wants her to continue working with the board to help interview and select from the shortlist. If the board hires a candidate from the list, it will pay an additional $30,000 success fee.
Ms. Jeffery said the model is intended to link "a significant portion" of the fee to achieving results.
"We think that pay for performance is a nice way to do it," she said.
The fees will be higher, but based on the same model, for searches for U.S. directors to serve on Canadian boards, she said.
Beverly Behan, head of New York-based corporate governance consulting firm Board Advisor, will serve as the firm's U.S. affiliate to search for female candidates. Ms. Behan said she has already developed a list of female corporate executives who are interested in sitting on Canadian boards and are "untapped" talent.
She said she has seen boards make the mistake of searching for anyone who is an accomplished female executive without insisting on finding candidates who add specific skills needed by the board.
"I know they are out there," Ms. Behan said. "I know the quality of candidates I've been talking to since I went hunting, and they're quite spectacular."
The new search firm is launching at a time when many boards are paying more attention to women. Seven of Canada's provincial securities commissions – including the Ontario Securities Commission – have published proposed new guidelines recommending companies report annually on their gender diversity.
Ms. Jeffery said many companies want to be able to report they are making progress on the issue, and need outside help to find new female candidates. She said 80 per cent of director positions are currently filled using recommendations from board members, which is a factor in the slow pace of change in gender diversity.
"The guys reach into their own networks, and their networks are made up of guys like them, so that's why we've been unable to get much movement," she said.