By now, female executives were supposed to have smashed through the glass ceiling and reached parity in corporate leadership positions.
But look around: Men still dominate the boardrooms and C-suites of Canadian companies. We take a look at exclusive data and speak with leading female business leaders—and a male ally—to find out what it will take to finally bring equality to corporate Canada
Isabelle Courville
Chair of Canadian Pacific Railway
Isabelle Courville photographed at CP Rail's head office in Calgary.Elyse Bouvier/The Globe and Mail
The real issue is board renewal. Boards everywhere need to constantly evolve, and that means regularly evaluating directors and assessing corporate needs. Is the company entering new geographies or adopting new technologies that require different skills and experiences on the board? I hope and trust that if boards were renewing more, female representation would not be an issue any more. After all, lots of women are capable and knowledgeable in IT and finance. I would be very surprised if boards opened up lots of new spaces and still weren’t able to get enough women.
In Canada, we might need a bit of help on that front—not necessarily through quotas, but through term limits. In France, legislation caps director tenure at 12 years, three mandates of four years. After that, you are no longer considered independent. Boards say, "We need this [long-time director’s] expertise at the table." Okay, the person can stay on as an adviser, but they can no longer serve on some key committees. Fifteen or 20 years on a board is too long. Any country that adopts any sort of quota system forces board renewal, because otherwise you can’t get enough director openings to meet those quotas.
Board chairs and nominating committees also need to be careful when creating profile descriptions for new directors. If it says something narrow like “sitting CEO in the same industry,” there may not be many women candidates that can fit. In other cases, the board’s list of criteria is so long it’s a complete impossibility to find a person who matches them all. You need to build in some flexibility in candidate criteria and then, through a solid onboarding process, invest in the person who joins your board.
I’ve never had any difficulty finding qualified women for boards on which I serve. I’m the chair of Laurentian Bank [at the time of the interview—she stepped down in April], and that board is 50-50 men and women. I was on the board of my engineering school, an area in which there are fewer women, and we had a lot of discussions: “Okay, let’s look at accountants and other professions that can help us.” When I was a woman in business, there weren’t many organizations that could help me, but now Canada has lots of associations that promote female directors, from the Institute of Corporate Directors to various provincial bodies. I personally maintain a list of potential female board candidates, and when I’m asked to join a board and I can’t, I pass on my list.
New board members with different profiles and from different backgrounds will ask questions that no one else on the board may have thought to ask, such as questioning standard procedures, and that may lead to interesting discussions. I find my female colleagues who sit on boards are really courageous directors, not afraid to say, “I don’t understand that.” It may be that no one really understands that but are reluctant to ask.
Each of us builds our own credibility in the board arena. I have been very coherent in how I focus my board work: in regulated, capital-intensive, B2B companies, often unionized. I’m an engineer and a lawyer, and I understand those industries. Go on boards where you have deep knowledge and build your own credibility from there.
Women board members really do serve as role models. I was president or CEO four different times. At Hydro-Quebec, I ran the transport division. They had never had a woman working in that division; I was the only woman and the president. Within three years, without any kind of forcing on my part, there were 50% women around the management table in that division. If you want to have women on your board, appoint a woman as chair of your nominating committee. We women have our own networks of interesting female colleagues, and when the board is diversified, it really sends a message.
Kathleen Taylor
Chair of Royal Bank of Canada and former CEO of Four Seasons Hotels & Resorts
Kathleen Taylor photographed at the Royal Bank's headquarters in downtown Toronto.Genevieve Caron/The Globe and Mail
I’ve been on this journey from the first roundtable on “comply or explain” legislation, where we thought we had found the secret formula for making big things happen. That has turned out not to be the case. It’s fair to say people have been disappointed with the pace of change on both gender and non-gender diversity on boards, and that’s been a surprise to me. I was one of the people who believed the transparency "comply or explain" brought would lead to change. Some of it has to do with the lack of turnover and long tenure on boards. Some has to do with the fact that at the same time as we were pushing for greater diversity, average board size was getting smaller and older. Some of it is that some boards just aren’t interested in this issue.
Having said that, we’re starting to see the institutional investor community bringing their voices to the fore, and I think that will prove to be a watershed moment. When we launched “comply or explain,” someone told me board diversity was “not really on our agenda.” There’s been a sea change in that view, because major institutional investors and their proxy advisory representatives come to the table and say, “Diversity of gender, background and experience bring huge value to the corporation, and we will now use our voting power to try to institute some changes.” CPPIB, BlackRock, the list goes on—if you have no women on the board, it means you’re not taking diversity seriously, and we’ll vote against your governance chair. And next year, we will engage more directly. I’m more hopeful today for the prospects of diversity than I was a year ago.
Before we start looking at quotas, I’d like us to focus on targets. What gets measured gets done, but we don’t actually say what we’re going to achieve over the medium to long term. We say it about sales targets or earnings-per-share growth—how about measuring what we say is the most important asset, which is people? People say targets are the same as quotas. No, they’re not. Quotas are rules. Targets are aspirational. We set reasonable milestones in order to get there. Look at the 30% Club and the impact that has had overseas. When the 30% idea took hold, everyone moved toward it. It gives everybody a road map. A whole network of people went individually after each company, elevating the voice around that commitment.
During my tenure as a director, I’ve seen the number and the proportion of women go up, and what that brings is a broadening of how people think about and approach challenges because of different experiences at the table. Some people argue that a female and male executive would have the same basic experiences to draw upon, and that’s right on many levels, but it’s also well documented that women think about many things differently. I do believe the proportion of women on a board matters. I have observed that when the number of women in any group reaches a critical mass—about a third—their effectiveness goes up. It probably has an effect on me as well. It signals to me that the environment is open, thoughtful, curious, inclusive. You want to be in a place where no question is deemed out of bounds, and you can feel free to dig into issues you’re confused or have something to say about. When I was an executive in the hotel industry, there is no question that when our board moved from predominantly male to more female, the topics, the observations, the proportionate amount of time devoted to discussing talent versus compensation changed.
And the idea that there aren’t enough qualified women, that’s nonsense. There are dozens and dozens of organizations and resources, including women directors like myself, available to anyone who wants to ask about women qualified and interested in being board members. Hundreds of us offer suggestions as part of our daily referral system. Not enough women? This is a big country. That’s a bit of a cop-out.
BOARDS BY THE NUMBERS
Based on data compiled by the Rotman School
of Management on 289 companies on the
S&P/TSX Composite Index
2008
9.8%
Percentage of female
directors on
S&P/TSX
Composite
boards
2013
13.1%
2018
24%
2008
122
S&P/TSX
Composite
boards with no
female directors
2013
88
2018
6
ONE
31.8%
Canadian boards
by number
of female
directors
(2018)
TWO
27.6%
THREE
21.8%
FOUR
8.4%
FIVE+
7.9%
NONE
2.5%
MALE
Percentage
of newly
appointed
directors on
Canadian
boards
in 2018
62%
FEMALE
38%
VISIBLE MINORITY
13%
BOARDS BY THE NUMBERS
Based on data compiled by the Rotman School
of Management on 289 companies on the
S&P/TSX Composite Index
2008
9.8%
Percentage of female
directors on
S&P/TSX
Composite
boards
2013
13.1%
2018
24%
2008
122
S&P/TSX
Composite
boards with no
female directors
2013
88
2018
6
ONE
31.8%
Canadian boards
by number
of female
directors
(2018)
TWO
27.6%
THREE
21.8%
FOUR
8.4%
FIVE+
7.9%
NONE
2.5%
MALE
Percentage
of newly
appointed
directors on
Canadian
boards
in 2018
62%
FEMALE
38%
VISIBLE MINORITY
13%
BOARDS BY THE NUMBERS
Based on data compiled by the Rotman School of Management on 289 companies on the S&P/TSX Composite Index
2008
2008
122
9.8%
Percentage of female
directors on
S&P/TSX
Composite
boards
S&P/TSX
Composite
boards with no
female directors
2013
2013
88
13.1%
2018
2018
24%
6
ONE
31.8%
Percentage of newly
appointed directors on
Canadian boards
in 2018
Canadian boards
by number
of female
directors
(2018)
TWO
27.6%
THREE
21.8%
MALE
62%
FOUR
8.4%
FEMALE
38%
FIVE+
7.9%
VISIBLE MINORITY
13%
NONE
2.5%
Caroline Codsi
Founder and president of Women in Governance, dedicated to increasing female representation in the corporate sphere
Why aren’t women moving up? Let me start with the reasons that belong to women. Women underestimate themselves. They don’t talk about their achievements, or ask for pay increases and promotions. A guy will say, “I’ll wing it at the meeting,” and a woman will say, “I need to read all night.” This is why, when you add women to the mix, you bring up the boardroom’s depth—because the men around the table are like, “She’s done her homework.”
As for organizations, they need to understand they shouldn't be doing this to please women. They should be doing this because they want to make money. When you're Reitmans and you have 11,000 employees, 80% of them women, and maybe 95% of your clients are women, you don't think a woman would help your strategy? After all these years, Reitmans ended up adding one woman to its board.
As for the government, I'm prolegislation. Not because I want an easy way in—I'm as competitive as the next girl—but because it's not happening naturally. European countries that have imposed quotas for women on corporate boards have hit those targets. But here in supposedly progressive Canada, among all publicly traded companies, according to data from the Canadian Securities Administration, we have 14% of board seats held by women.
There are 211 publicly traded companies that have no women at all. Their excuse is they can't find qualified women. But if they had no choice, of course they'd find competent women. My line is, “When you legislate, you find women. When you don't legislate, you find excuses.”
Cogeco Communications
57.1%
Companies with the
highest percentage
of female
directors
(2018)
Saputo Inc.
50%
Sienna Senior Living
50%
Laurentian Bank of Canada
45.5%
Extendicare Inc.
44.4%
CP Rail
44.4%
CIBC
43.8%
Valener Inc.
40%
Percentage of female
directors at select
companies with
a female CEO
TransAlta Corp.
40%
Atco Group
30%
Indigo Books & Music
30%
Lundin Mining
25%
S&P/TSX Composite Average
24%
Linamar Corp.
16.7%
Perpetual Energy
10%
Communications Services
33.2%
Utilities
31.7%
Consumer Staples
Percentage of
women on
boards by
sector in
Canada
30.6%
Health Care
27.9%
Financials
27.8%
Industrials
27.7%
Real Estate
23.1%
Materials
France
20.5%
40.8%
Consumer
Italy
19%
35.8%
Energy
Finland
18.6%
33.7%
IT
Australia
17%
28.7%
AVERAGE
United Kingdom
24%
26.8%
Canada
25.8%
Netherlands
22.1%
United States
21.7%
Switzerland
21.3%
Women’s global
representation
on boards by
country (2017)
Germany
20.9%
India
13.8%
Japan
5.3%
Cogeco Communications
57.1%
Companies with the
highest percentage
of female
directors
(2018)
Saputo Inc.
50%
Sienna Senior Living
50%
Laurentian Bank of Canada
45.5%
Extendicare Inc.
44.4%
CP Rail
44.4%
CIBC
43.8%
Valener Inc.
40%
Percentage of female
directors at select
companies with
a female CEO
TransAlta Corp.
40%
Atco Group
30%
Indigo Books & Music
30%
Lundin Mining
25%
S&P/TSX Composite Average
24%
Linamar Corp.
16.7%
Perpetual Energy
10%
Communications Services
33.2%
Utilities
31.7%
Consumer Staples
Percentage of
women on
boards by
sector in
Canada
30.6%
Health Care
27.9%
Financials
27.8%
Industrials
27.7%
Real Estate
23.1%
Materials
France
20.5%
40.8%
Consumer
Italy
19%
35.8%
Energy
Finland
18.6%
33.7%
IT
Australia
17%
28.7%
AVERAGE
United Kingdom
24%
26.8%
Canada
25.8%
Netherlands
22.1%
United States
21.7%
Switzerland
Women’s global
representation
on boards by
country (2017)
21.3%
Germany
20.9%
India
13.8%
Japan
5.3%
Companies
with the
highest
percentage
of female
directors
(2018)
Cogeco Communications
Valener Inc.
40%
57.1%
TransAlta Corp.
Saputo Inc.
40%
50%
Atco Group
Sienna Senior Living
Percentage
of female
directors
at select
companies
with a
female CEO
30%
50%
Indigo Books & Music
Laurentian Bank of Canada
30%
45.5%
Lundin Mining
Extendicare Inc.
25%
44.4%
S&P/TSX Composite Average
CP Rail
24%
44.4%
Linamar Corp.
CIBC
16.7%
43.8%
Perpetual Energy
10%
France
Communications Services
40.8%
33.2%
Italy
Utilities
Percentage of women
on boards by
sector in Canada
35.8%
31.7%
Finland
Consumer Staples
33.7%
30.6%
Australia
Health Care
28.7%
27.9%
United Kingdom
Financials
26.8%
27.8%
Canada
Industrials
25.8%
27.7%
Netherlands
Real Estate
22.1%
23.1%
United States
Materials
21.7%
20.5%
Switzerland
Consumer
21.3%
19%
Germany
Energy
20.9%
Women’s global
representation on
boards by country (2017)
18.6%
India
IT
13.8%
17%
Japan
AVERAGE
5.3%
24%
David Pathe
CEO of Sherritt International and co-chair of the 30% Club Canada, whose mission is to increase female representation on boards
There’s a recognition that these issues are easy to talk about but difficult to make progress on. Certainly, that’s been Canada’s experience in recent years. But among the big TSX 250 companies, we frankly lag behind other jurisdictions on diversity.
I fundamentally believe organizations that are more diverse will make better decisions, on average, over the longer term. Ultimately, the opportunity is to define the place you want to work, where people from different backgrounds or experiences can thrive and grow. Changing the culture in any organization is difficult, but for it to have any chance of success, there needs to be a public, visible commitment from the top.
Some boards are voluntarily adopting quota-style measures because they know that if the industry doesn't take this on itself, quotas may well be the result. We have a couple of women on Sherritt's board, and it takes a while to get people to believe that the commitment to this issue is real and not just lip service. But I think we're really starting to get traction. It's incumbent on companies to get ahead of this, because even if they aren't swayed by arguments of diversity or don't think their business should be a place for social experimentation, it's the way the world is going.
More and more of your investors are going to be looking for it.
Indira Samarasekera
Director at Magna International, Scotiabank, Stelco Holdings and TC Energy
Indira Samarasekera photographed at Toronto’s Pearson International Airport.Arden Wray/The Globe and Mail
On the boards of the TSX 60 companies, there has been a significant change over the past five years. The challenge is that a large number of Canadian public companies are small, and these have a lot fewer women on their boards. Partly it’s that they don’t have the resources to do extensive director searches to find candidates who would be a good fit and bring the right kind of expertise.
The lack of women in senior leadership positions is another reason for a shortage of female directors. To be on a board, you need to have exposure at a senior corporate level, and when you look at statistics on how many women are in leadership, it’s disheartening. Many boards are looking for people with financial expertise who can chair an audit committee, and you need to have been a CFO at a company of similar size and complexity. Not many women have been in such a role, and those who have are in such great demand that they often have to say no. The pipeline is not as robust as it could be. It may be that there simply aren’t enough women in certain areas or professions, such as technology or engineering, and addressing those natural shortages will take time. But I think quotas have to be approached with a great deal of caution. I’m not a supporter. They run the risk of devaluing the individuals who are brought on through a quota approach.
But there are many, many qualified women who could serve on a range of boards. Banks are leading the way. They have done a very good job of ensuring that women who come onto their boards are highly qualified but also that their boards reflect and represent not only gender diversity but geographic, cultural and professional diversity. It’s not about women per se; I think female representation is overemphasized. It’s about having a diversity of experience—that’s what’s enriching, especially when a company has operations around the world. Boards benefit from having people with industry experience but often a director from outside the industry will ask questions that may not occur to industry insiders. And you need to bring in fresh ideas. Canada has a lot of board members who are in their 40s and 50s, and a lot more younger people have experience now as CEOs and senior VPs.
Women would do well to educate themselves on the opportunities out there. Say there are companies that don’t have resources to find female directors: Maybe organizations like Catalyst in combination with individual women could identify boards that would appreciate women candidates with specific capabilities and proactively reach out. It’s all about fit. Each board is looking for a range of skills to round out its director mix, so women need to have a clear view of what they’re bringing to a particular board. If you want to be on a board, educate yourself on what it takes. For example, take time to serve on non-profit boards to prepare for future corporate boards. Volunteering on non-profit boards can also introduce you to people who can assist you. Identify a person who could be your champion—an individual who knows you well and understands your strengths. You also have to discipline yourself to stay abreast of the big picture. You have to understand technology, cybersecurity, geopolitics, disruptive industry trends, and these aren’t thing you can just take a course on.
I’ve had not only good mentors but champions. John Mayberry, the former CEO of Dofasco, actively promoted me to join the board of Scotiabank. When I first joined the Scotia board, it was the middle of financial crisis, and it was important for me to come up to speed as quickly as I could. Boards are doing a much better job of providing continuing education for directors—I could have used more of that 10 years ago.