The Status of Women Corporate Directors in Canada
Pushing for Change
Corporate boards of directors are not taking full advantage of the benefits that including qualified, competent women can bring. Representation by both genders on corporate boards should thus be increased to a minimum of 40%. These are the key recommendations included in an IGPPO policy paper.
The report also recommends that the gender balancing process should take place gradually, with target dates set based on the pace at which organizations appoint new directors, and must not be done at the expense of board quality. Companies should also integrate diversity and gender equality into their corporate policies and report regularly on their progress.
Since 1990, the percentage of women directors on boards of North American publicly- traded corporations had stalled at 15%.
According to Dr. Yvan Allaire, Chair of the Board of Directors of the Institute for Governance of Private and Public Organizations (IGPPO), “The proportion of women directors remains low despite the fact that the reasons invoked to explain this situation – perhaps plausible in years past- have since become largely excuses or equivocations .”
The policy paper was prepared by a working group made up of IGPPO board members. The group was chaired by Monique Lefebvre Ph.D., a well-known psychologist who specializes in executive coaching. The report was later approved by the full IGOPP board (with one dissenting vote).
“After two decades of minimal progress, it is time to increase gender balance on corporate boards in Quebec and the rest of Canada,” said Lefebvre. “The governance of companies benefits from the balanced perspectives of men and women oin their board.
The Report makes the obvious point that competence remains an essential quality for all board members, whether male or female.
The IGOPP policy paper makes five major recommendations to help increase the number of qualified women directors on corporate boards in Quebec and Canada:
1. A 40% gender equality target for corporate boards
The IGOPP policy paper recommends that Canadian companies strive for a minimum of 40% representation of both genders on their boards. Achieving this target should be calibrated to the pace of change in board membership for each particular company.
2. Integration of gender diversity into corporate strategies
Companies should systematically seek out and compile a list of potential women candidates to replace outgoing board members. The nomination committee and the board of directors should thus establish competency profiles for potential new members in order for the board to add value to the organization.
3. Use of professional recruitment firms
Identifying and recruiting qualified women candidates as potential replacements for outgoing directors may require the use of outside recruitment firms. To increase the pool of potential candidates, recruitment efforts should extend beyond individuals who are already directors or chief executive officers of other major corporations.
The Working Group recommends that companies evaluate their progress with respect to women representation on their board and make this information public and easily accessible. Boards should adopt a long-term succession plan for board membership, which would include measures and timelines to raise the representation of women. The company’s annual report should describe these measures and report on progress achieved over the years.
The report’s final recommendation is that the board chair or a senior director should work closely with incoming board members to ensure their integration and to familiarize them with the dynamics and culture of that particular board.
The Group advocates a gradual voluntary approach rooted in a clear commitment to increasing the proportion of women on corporate boards at an accelerated rate. “The recommendations do not involve legal mandates forcing companies to increase the number of their women directors. The goal is to help companies recognize the benefits that greater diversity can bring,” concludes Dr. Lefebvre.