Federal government gets on board with female leaders

Report setting 30 per cent target for women on boards ‘groundbreaking,’ ‘call to action’
By Liz Bernier
|Canadian HR Reporter|Last Updated: 10/06/2014

Women represent nearly one-half of the Canadian workforce — but when it comes to leadership positions, they are woefully underrepresented. Only 15.9 per cent of corporate board positions at FP 500 companies are held by women, according to the federal government.

"Canada has a wealth of talented, well-educated women and we want them to be able to participate in all aspects of the Canadian economy," said Kellie Leitch, federal minister of labour and minister of status of women.

The government has released the report Good for Business: A Plan to Promote the Participation of More Women on Canadian Boards and set out the concrete goal of 30 per cent female representation on boards in the next five years.

It will help contribute to a stronger economy, said Leitch.

"The facts really speak for themselves," she said. "Whether it be tracking the performance of Fortune 500 companies in Canada between 2004 and 2008 where it was found that the companies that had the most female directors outperformed those with the fewest… or the general business case that has been accepted by many (that diversity yields) stronger financial performances or heightened innovation."

The report is an important step in advancing the conversation, said Pamela Jeffery, founder of the Canadian Board Diversity Council in Toronto.

"This gives permission for the conversation to happen. And from an HR standpoint, that’s really key because sometimes a senior human resources professional will be stymied, because the board might not necessarily even want to have the conversation."

Setting goals – not quotas

The goal of 30 per cent representation over five years is a good one, said Alex Johnston, executive director of Catalyst Canada, because that’s around the point where organizations will start to see a culture shift.

"For the 40 per cent of public company boards in the country that have no women on their boards, cracking that first step is important — getting a woman on your board — but really, it’s once you get to about 25, 30 per cent that you start to see a shift around the table, and that is important," she said.

"Often, more women on boards shifts throughout an organization in terms of pipeline development and the executive committee."

Unlike a hard quota, the 30 per cent goal offers organizations the flexibility to involve more women in a way that makes sense for their individual sectors, said Jeffery.

"I’m not in favour of quotas and neither is the Canadian Board Diversity Council. We’ve always said that we want what we call a ‘made in Canada’ approach, which is more collaborative," she said. "Take a look at it for your own business, and move along towards the 30 per cent in a way that makes sense for your business."

The report also helps pave the way for the "comply or explain" regulatory approach the Ontario Securities Commission (OSC) is on the verge of adopting, said Jeffery.

This approach is a good one for Canadian business, said Johnston, because it requires disclosure and goal-setting but still has some flexibility.

"I think it’s going to require disclosure, I think it’s going to require people to set a target, I think it gives companies flexibility to set a target that is relevant for them, for their sector, but that is meaningful. I think it will become very difficult for people to not have meaningful, relevant targets," she said.

One of the report’s most important recommendations looks at how leaders should respond to the challenge, said Leitch.

"It is about leadership — leading the way and leading by example," she said. "It’s a call to action and it’s groundbreaking from the standpoint that that call to action has not been out there before."

There’s a key opportunity for leaders to take a mentorship role for talented women, said Leitch.

"I talk about encouraging every business leader in the country, male or female, to pick that one young woman that they’re going to champion," she said. "My champion in my current role was Minister Jim Flaherty and he encouraged me to run for office, but then he also helped set the path for me and encouraged me to follow in his footsteps in public service. And I think that if we have leadership of that calibre across the business sectors in the country, where senior business leaders, CEOs, presidents, chairmen — men and women — identify that one young women to follow in their footsteps… we’re going to move the bar here very quickly."

Moving forward, Johnston would like to see the comply or explain approach passed by the OSC, and to have more companies committing to the Catalyst Accord, which is a voluntary initiative to set a goal and a target.

The government report is a good first step, said Jeffery — but there’s still work to be done.

"We would like to see the results, as everyone I think who has been busy working on this," she said. "We want to give corporate Canada this opportunity to do it on their own. But then if we don’t see meaningful change, and we’re nowhere close to the 30 per cent as the next four years roll along, then we are going to be advocating for a different approach."