On February 16th, Odgers Berndtson’s Elaine Roper – a partner in the firm’s Public Sector and Board practices – participated in a Women Get on Board panel event hosted by Gowling WLG, focused on “Agents of Change: Boards that are Leading on Gender Diversity”. The panel also featured Daryl Yeo, who spent four decades in executive positions in financial services before focusing on a number of independent board positions with Community Trust Company, Wealth One Bank of Canada and other institutions. It was moderated by David McFadden, Counsel, Gowling WLG, and Chair of the Board of Directors of Toronto Hydro Corp., 407 International Inc. and PCI Geomatics Inc.
Why does gender diversity on boards matter?
Having played an instrumental role in building several boards including the Canada Infrastructure Board and the CBC Board, and as an active board member for the Royal Ontario Museum and Canada Games Council, Elaine asserted that female board members often bring very different (and necessary) dimensions to a discussion. She also underscored that including a "token" woman at the table isn't enough. "I've seen and heard women ask courageous questions" she shared, and feels that it's essential for all directors to recognize the unique value brought to the table by female members. Elaine also stressed that it's the responsibility of the entire board to engender a respectful and inclusive culture, where all feel empowered to share their unique perspectives.
Having worked with more and more female executives over the last 15-20 years in the financial services industry, Daryl also feels strongly that gender diversity brings new and crucial angles to problem-solving --and, in some cases, can yield stronger financial results for companies. He also clarified that while board gender diversity should be a priority, it's equally important to consider the experience that each brings to the board--whether male or female --, as well as other dimensions of diversity.
What best practices can help enable board diversity?
Both panelists were invited to comment on how a few tenets from the Canadian Gender and Good Governance Alliance’s Toolkit for Boards have been implemented to advance board gender diversity. And they focused on two key elements:
On many boards, formal evaluations are now becoming an accepted best practice, though as Elaine explained, the degree of rigor can vary. Most boards approach evaluation by running self and chair and committee evaluations, while others are still a bit squeamish about undertaking peer evaluations. She asserted that assessments are a critical tool to check how the board is functioning, and an important lens to help members reflect on key questions like "Do we have the right tools and processes in place? Are we spending meeting time effectively?", “how are we performing as a whole board and individually?”.
Daryl was aligned on the importance of formal evaluations, sharing: "When the board is viewed as one of the company's most critical strategic assets, having the right members is critical to the success of the company". On many of the boards he sits on, he explained, this is taken very seriously. Peer, committee, and skill set assessments have helped board and governance chairs identify skill set gaps and individual areas for improvement to formulate a targeted action plan for improvements. In some cases, coaching takes place with board members who may not be contributing as they could. In other cases, the evaluation process sheds light on the need to seek out new skillsets that are becoming necessary to surmount new challenges faced by the organization--cybersecurity for example.
Term and age limits
Succession planning is a key practice for managing board renewal and facilitating the addition of women on boards. Without vacancies on a board, it can be difficult to add women. Term and age limits are two options for encouraging board renewal, with the former being considered a leading governance practice and a natural mechanism for bringing on new board members. The latter typically sets general age guidelines by which a director must retire.
Elaine explained that in the public sector, she sees clear term limits being imposed to help boards prepare for turnover in a planned and meaningful way. On the private side, though, there is a less rigid implementation of both limits. OTPP’s voting guidelines for this coming cycle of Annual General Meetings is to review those Directors who are approaching 10+ years on a board, their ongoing performance, attendance and age. There is a strong feeling, fairly widely shared, that a valuable, highly engaged director with a consistently strong performance record should not be removed just because s/he has hit a term limit or a certain age.
While agreeing that term limits are one way to get board performance moving forward, Daryl also cautioned against ousting valuable members for the sake of it. He shared that reviewing board performance and membership annually is a good rule of thumb.
Are quotas or targets more effective in advancing gender diversity?
Citing recent stats, Elaine noted that among the very largest Canadian organizations, we seem to be at a tipping point, with women now constituting 22% of all S & P 500 directors, increasing from 16% in 2017. She cites this success to a few factors: Not only do larger organizations feel the scrutiny of governing bodies more acutely, but they also have a broader senior talent pool from which to draw. Many smaller and mid-sized organizations haven't achieved these targets yet, though, and she feels that legislation may be passed in the next few years to mandate board diversity for organizations of all sizes.
Looking to examples in Europe, Daryl has observed stricter quotas in certain sectors, but also noted that this rigor relies heavily on the leadership of the chair to set the tone.
Elaine concluded that media is already highlighting stories of boards lacking gender diversity, citing a few examples of public shaming that have catalyzed Canadian organizations to appoint female members.
What advice can you share with younger audience members seeking board positions?
To wind up the discussion, the panelists shared some thoughts on how younger audience members should approach seeking out their first board membership.
Daryl emphasized that boards are looking for members with specific skillsets and expertise. That said, he recommended that those seeking board positions should take a good look at their own CV to determine what expertise they can bring to the table, and research companies and sectors to whom their perspective would be the most applicable.
Elaine advised those seeking their first board position to identify an organization whose mission they are passionate about. She also cautioned younger audience members to fully grasp the commitment that a board position entails before jumping in. She reiterated that board membership entails a substantial investment of time and energy – about 300 hours a year on average – but also can be incredibly rewarding.
Below are some pictures from the event:
Deborah Rosati, Founder & CEO of Women Get on Board introduces the panel.
Panelists from left to right: Daryl Yeo, Elaine Roper and David McFadden.
Deborah Rosati speaking to the crowd.
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