Do you know how to get on the board of directors of a major corporation?
I don’t, and it turns out a lot of other women don’t either. It’s hard not to look at the stats for women on boards of directors and wonder if something is amiss. But what to do about it?
Eighteen months ago the Ontario Securities Commission adopted a name and shame policy, mandating that companies listed on the TSX increase the number of women on their boards or explain why they haven’t. The results? Not much. Nearly half of the boards still have zero women on them, and women make up only 13 per cent of overall board membership. Studies have found that to make a difference in corporate culture and decision-making you need at least three women to change the dynamic. Women are said to be more collaborative, they are more vocal, they ask more questions all of which leads to better decision making. The Institute of Corporate Directors offers a 12-day training course. Even though it comes with a hefty pricetag, $17,500 for the four modules, women are taking it – but they aren’t getting offered board positions.
So if having a mixed board is good for business and qualified women are stepping up for the job, why isn’t it happening?
My guest, Richard LeBlanc, Associate Professor of Law, Governance and Ethics at York University points to inertia in the business community. Boards are reluctant to go outside their circle of friends, associates and acquaintances when they are recruiting board replacements. That’s one problem. The other is there is not enough turnover on boards to free up positions for newcomers. He told me in Asian countries it is common to see a limit of 10 years before directors are required to leave a board; in North America you can find examples of board members who have been around as long as 50. The reality is, it’s a closed club.
The Alberta Securities Commission just announced they are going to follow Ontario’s lead in requiring boards to disclose or explain the absence of women on their boards. This will no doubt yield useful and interesting information. But if the ASC really wants to spur dynamic change, they should be calling for term limits on board members. Creating more opportunities for appointment is the only way women are going to be able to eventually close this gap.