Wanted: Diversity in oil and gas C-suite

In the Canadian oil and gas sector, women in the executive level are still far too few, according to a recent report.

Only 3.2 per cent of CEOs in the field identify as female, according to the report from executive search firm Bedford. 

This is the case even though the oil and gas industry has a higher percentage of female board members (26.6%) compared with mining (21.8%) and clean technology (23.8%).

“It’s clear that the industry has taken strides on board diversity, but it lags behind when it comes to diversity in the C-suite, particularly for CEOs,” says Stephen Diotte, compensation partner with Bedford.

“The industry needs to make shifts to become more intentional when it comes to C-suite diversity. This could include best practice tools like developing a more comprehensive skills matrix and researching corporate practices at companies that have been successful in diversifying their boards and executive teams.”

Few companies taking ‘concrete measures’ for diversity

The problem is that few employers are actually doing something to solve this problem, according to the report.

“While companies researched showed an awareness of the potential benefits of diversity representation on the senior management team, few companies report on concrete measures to promote executive or board diversity,” say Bedfor’s Diotte, managing partner Frank Galati and compensation consultant Samantha Van Tighem in their report The Oil and Gas Report Executive and Board Compensation and Governance.

“Observed board nominating practices in this year’s study, intentional or otherwise, may be exacerbating diversity of thought on Canadian oil and gas company boards, increasing the risk that boards could be taking a narrower view on strategic issues, potentially resulting in sub-optimal decisions for shareholders.”

For executives in the oil and gas sector, 11.6% of Named Executive Officers (NEOs) in 2022 identify as female, compared to 9.7% in 2021, according to the report, based on a survey of 143 Canadian and U.S. upstream, midstream, downstream and integrated oil and gas operators, conducted in October 2023.

Among them, only 6% are CEOs and only 6% are COOs. Far more are those with Functional Vice President/Senior Vice President (VP/SVP)(27%) and CFO titles (23%).

Female legal executives (19%) and in other executive roles (17%) also outnumber women in CEO roles.

Nearly nine in 10 (86.6 per cent) working women have experienced “Tall Poppy Syndrome” – where people are attacked, resented, disliked, criticized, or cut down because of their achievements or success, according to a previous report.

And just as many feared, the COVID-19 pandemic took a hit on the progress of women in the leadership ranks, finds a recent report from The Prosperity Project.

Executive, board member compensations

This lack of gender balance in the oil and gas industry can hurt women’s ability to earn anywhere near the highest salary in the field, according to Bedford’s report.

Looking at companies in the 50th percentile, the earnings of CEOs in the oil and gas industry in 2022 range from $425,255 to $16,622,169. And while some of these CEOs got a 12 per cent drop in their total compensation in 2022 compared to 2021, some got an increase of as high as 47 per cent.

In comparison, within the same percentile, the range of total compensation for board members in 2022 is $48,676 to $422,923. The highest increase 2021-2022 year-over-year is 33 per cent.

Canada’s top 100 CEOs in 2022 made 246 times more than the average worker, according to the Canadian Centre for Policy Alternatives (CCPA).

“While some progress has been made in recent years, there is still a long way to go in achieving gender equality in the workforce,” says Matthew Baird, senior staff economist at LinkedIn, in a previous report.

Some of the things that can help do that are “policies and practices that address discrimination and promote diversity, including expanding the talent pool by hiring for skills rather than job titles, providing flexible arrangements to accommodate the needs of all workers, and creating opportunities for women to advance into leadership positions,” he says. 

“By continuing to monitor and address gender disparities in the labor market, we can build a more equitable and prosperous future for everyone.”