In a recent proposal put forward to Canada’s major banks, Quebec-based shareholder rights group MÉDAC (Mouvement d’éducation et de défense des actionnaires) asked the Big Five to commit to achieving equal representation between men and women on their boards in 10 years. Shareholders strongly rejected the proposals, with an average of just 11% voting in favour. A recent poll by Compas Inc. showed that Canadian CEOs didn’t like the idea, either, with just 4% expressing support for MÉDAC’s proposal.
Fifty-nine per cent of respondents said companies should be under no external pressure to appoint women to their boards, while 37% said that boards should appoint more women but without being subject to specific quotas. As one exec put it, women should be selected “because they are the best choice, not because it is mandated.”
When asked why they didn’t believe in affirmative action on boards, CEOs said they were most concerned that it would lead to the appointment of too many women who are advocates rather than experts. Executives also feared that quotas would result in too many women being appointed because they were the daughters, wives or sisters of prominent men, rather than women who were successful on their own merits. Another worry was that the talent pool of qualified women wasn’t big enough.
The executives did feel that having more qualified women on boards would have a positive effect on corporations. It would allow them to reach a broader client base and would improve decision-making inside the companies.
Instead of quotas, chief executives preferred softer measures to increase female participation on boards. Thirty-nine per cent of the respondents said the best strategy was for corporations to create mentorship programs, while 28% felt the most important step was encouraging women to take directors’ courses. “Women have proven themselves to be exceedingly competent,” said one executive. “Let’s just move toward the concept of meritocracy.”
Why should corporations seek more women on boards? Use a 7-point validity scale where 1 means not at all valid and 7 means a very valid reason.
|To reach out to a broader client base||3.9|
|To make better corporate decisions||3.7|
|To improve the quality of corporate management||3.4|
|To be fair to women||3.4|
|To open doors to visible and religious minorities||3.3|
Which of the following perspectives is closest to your own? Publicly traded corporations should:
|Be under no external pressure to have more women on boards||59%|
|Appoint more women to boards but without specific quotas||37%|
|Commit to have gender parity on boards in 10 years||4%|
Which is the best method for increasing female representation on boards?
|Corporate mentorship programs||39%|
|Encouraging women to take director’s courses||28%|
|Encouraging women to assume volunteer leadership roles||14%|
|More family-friendly services for executives||6%|