The question of quotas for women on corporate boards

How to break that ceiling

The XX Factor

Most Canadian business leaders agree that more women are needed on corporate boards—female representation has hovered at about 10% for years. But there’s little agreement about how to boost the numbers. Diversity advocates like Sen. Celine Hervieux-Payette have called for hard quotas on representation, while critics have argued that women should be appointed solely on their own merit. The Ontario government and the Ontario Securities Commission have both endorsed “comply or explain” policies, which require boards to develop and disclose policies to improve their gender diversity, or else explain why they haven’t. And a federal committee struck earlier this year is due to release recommendations later this fall. We asked some of Canada’s business leaders which is the right way forward.

“I don’t think we should use quotas. A rule of 50% of board members being women in an industry when there’s no women to start with would be counterproductive. I think the way to look at the issue would be to work on companies to promote women to get the experience they need, internationally, nationally, to move them around enough so they get the right experience. After that, getting on the board would be just a matter of time.”

–Isabelle Courville, Chair, Laurentian Bank of Canada

“I think ‘comply or explain’ is a good way for people to start instilling processes around board appointments. It’s important for women to be considered for every vacant board seat that comes up to ensure that we’re looking at all the candidates and we’re not just tapping the shoulder of the guy we know well or the guy we’re comfortable with. Companies need to be held accountable for every board seat that comes up, and explain why that person was selected and what they bring to that board. They need to have a policy on general diversity in their boards to ensure they’re getting different perspectives around the table and not group-think.”

—Jennifer Reynolds, President, Women in Capital Markets

“I’m really in favour of having a voluntary, transparent commitment. When I started as an accountant, in 1980, roughly, there was less than 10% of women in the profession. When I see the situation now, there is a very significant evolution, but yet we need to make more progress. We have—right now—enough women who are competent and have experience to be able to get at least 30%, up to 40% membership around boards. I’m convinced of that. And we need to make the same progress at the level of the senior executive teams of large organizations. It’s not just enough to have women who are members of boards.”

—Monique Leroux, Chair, President and CEO, Desjardins Group

“I don’t know if we’re going to need quotas or not, because we haven’t tried anything yet. When you look at the Norway experience, they tried the moral suasion step, and then they tried voluntary targets, and then they decided to go heavy with mandatory quotas. The only way I could say I could support quotas is if we tried a bunch of other things and they don’t work. Having the CEO on-side is also important, but having a forward-looking chair, somebody who really sees diversity as a benefit, I think, is key to this.”

—Eileen Mercier, Chair, Ontario Teachers’ Pension Plan

“There shouldn’t be less than 40% of either gender on any board. That means at least 40% men, and at least 40% women. We have more women who are more educated than at any time in our history. They have degrees in law, administration and accounting—professions that really are well-prepared for managerial positions and board positions. There is no reason why we should not have these women. But I don’t call it a quota. I hate that word because the way I see it positioned by the business sector: the word “quota” means people with no qualifications. That’s where I have some problems because it’s, oh, they will appoint their sister. As far as I’m concerned, if they are smart, they will appoint a very competent woman.”

–Celine Hervieux- Payette, Liberal senator

“If we ever want to get there, I believe quotas are probably the way to go. But in the end, does it actually matter to have that many more women on boards? That depends on what your company is trying to achieve. With ‘comply or explain,’ at least there’s something like, let’s call it, a public shame. But public shame only works if the public actually cares. I would say right now there is certainly a group of women that cares deeply about it, but I wouldn’t say it’s necessarily representative of the general population.”

—Beatrix Dart, Director, Ellis Don

“I believe that the ‘comply or explain’ approach will, over time, lead to stronger representation of women on boards in Canada. It will not do so as quickly or as abruptly as a quota approach would, but I do not support quotas. I support boards seeking out highly talented individuals with relevant experience and skills, and if you do a good search, I believe it’s possible to assemble a stronger board by including a concern for gender, along with the other qualifications. I should add, however, gender is only one dimension of diversity, and it’s important boards focus on multiple dimensions of diversity.”

—Robert Prichard, Chair, Bank of Montreal

“I don’t think quotas move the needle in the right direction. I’ve always said to women you never want to be the potted plant; you never want to be seen in the eyes of others as the person who is here so that we can say we’ve got one. If you’re there overtly because somebody has a quota to fill, I can’t help but think you may feel somewhat compromised and your colleagues may feel differently about you than they do about others. Diversity does not begin and end with gender. It’s important that when we talk about diversity that we think about it in lots of different contexts, including age, gender, of course, cultural and ethnical background, and also diversity in thought.”

–Sue Paish, CEO, LifeLabs

“We’re really giving publicly traded companies a nudge to give more detailed consideration to this issue. By moving in the direction of having publicly traded companies have a policy that includes consideration of gender representation on boards and in senior management, we hope that they will really take that issue seriously, that they’ll consider how they’re finding people to be on their boards, how they’re moving women through senior management roles and making them eligible for boards appointments. The fact of the matter is that Canada appears to be behind some of the other jurisdictions both in terms of representation of women on boards and in senior management, and in terms of the regulatory response.”

–Mary Condon, Vice-Chair, Ontario Securities Commission

“The preferable approach for improving gender diversity on boards is ‘comply or explain’ rather than binding quotas. Why are we against binding quotas? We think it’s a blunt instrument. It can result in unintended consequences, such as the possible stigmatization of female directors whom the policy is designed to promote. A preferable approach would be, for example, to have gender quotas for the recruitment process for board candidates. Another is to professionalize the recruitment process. Don’t just go to the same friends that many board members go to now within their social milieu.”

—Stephen Erlichman, Executive Director, Canadian Coalition for Good Governance

“I don’t favour quotas. I don’t think we’re serving the public appropriately when we boil this thing down to quotas because I think there are other alternatives that could be explored. One could also get behind the numbers and look at why we haven’t identified more women. In my view, part of that is because the search strategy may not have been appropriate … If you execute properly you will find those people, and you won’t get them just because they are women. You’ll get them because they meet some of the other criteria that you have as a board.”

—Gail Cook-Bennett, retired chair of Manulife Financial

“The negative impact of quotas, in my view, is that it’s a numbers game versus a quality and value game. You’re filling a slot because you simply need to fill a quota as opposed to looking at the best skills and ensuring you’re including women in that group . What we need to do is make board selection more public, make it more visible—talk about the boards that are doing well and the diversity they have. Compare them to boards that aren’t diverse so people understand the dynamic of that.”

—Arlene Dickinson, CEO of Venture Communications

“I think that setting voluntary goals, as we’ve done with the Catalyst Accord, and adopting ‘comply or explain’ models in Canada are important steps for us to take … As well, sponsorship is critical to career advancement. What we’ve done with our sponsorship initiative [Catalyst Corporate Board Resource] is have CEOs saying on a peer-to-peer basis to another board director or nominating committee chair or to the CEO of a company, ‘here’s a woman I’ve worked with, I know her, I know what she’ll contribute to your board.’ That can be a really critical game changer—it’s a way to break through the barrier of being excluded from informal networks.”

—Deborah Gillis, CEO-elect, Catalyst

“When I went to work at Citibank in 1972 with a newly-minted MBA there were only two women vice-presidents in the entire worldwide organization. They were not allowed to eat in the VP dining room. I go back to a generation where it was, forget senior management, women were just not part of the game. I have that very long perspective where I think progress has been made … As directors, we need to keep an open mind about identifying talented, diverse candidates to bring into the process … [But] I’m just so personally against quotas, although I do admit that without some sort of metric and system it’s probably going to be many, many years before the goals that should be achieved are achieved.”

—Leslie Rahl, director, CIBC; founder Capital Market Risk Advisors Inc