Status of Women Committee on April 30th, 2014

[Alex Johnston]

Yes, 100%. What I love about the evidence is that it takes the conversation away from anecdotal examples where people go, “My God, I offered her a promotion and she said no. I just don't think women want it. Who cares?” That's an anecdotal example.

As soon as you have evidence, you have an informed conversation. What I love about the evidence is that you table it with CEOs and business leaders, and they go, “There's no way this is happening in my company, there's no way.” If I look at the project allocation, we'll see these differences, and they come back and go, “Oh my God, this is happening in my company.”

As soon as people are aware and they take the steps to be informed, change likely happens. I think the challenge with dealing with business leaders in particular is that they're juggling a lot of staff, and it's easy to say, “I have serious priorities for my shareholders. I have serious priorities coming down from the board. I don't really have time to think about diversity and inclusion.” It's about talent development, and they—

[Terence Young, Conservative, Oakville, ON]

Like, for example, mentoring.... Do you have any companies that have a formal mentoring program for women?

[Alex Johnston]

Tonnes, and mentoring has been happening for quite a while.

[Terence Young, Conservative, Oakville, ON]

How does it work best?

[Alex Johnston]

It depends on the companies. Some companies have something quite structured. Some companies say, “You as a senior leader need to be mentoring three to five people; that's part of your performance evaluation. I'm going to find out from those people how you're mentoring them.” There are different models, but companies are doing that well.

The sponsorship thing is different, and I like what Tom Falk did, because he said that sponsorship is succession planning and getting people into senior roles, and if you're only sponsoring people who look exactly like you, there's no way we're leveraging our talent.

[Terence Young, Conservative, Oakville, ON]

You say that the companies you're dealing with are making progress and you're pleased about the progress.

[Alex Johnston]

One hundred per cent.

[Terence Young, Conservative, Oakville, ON]

So you want to get more of it done in more companies.

[Alex Johnston]

One hundred per cent. The thing with the file allocation is that what we're saying to business leaders is if this is going on in your company, you have two problems. One, you need to be dealing with the front-line people who are allocating the files; and two, three to five years down the road when you're talking about promotion decisions, everyone thinks they're being objective. They think they're evaluating people fairly, and they're saying that they're both great and they think they're superstars, but look at what he took on and delivered, compared to what she took on and delivered.

Right out of the gate, they weren't put on the same path, and those are the kinds of things that good business leaders—and this is about leadership—understand. They take steps to say, “That's not happening on my watch. Now what are we going to do about it?”

[Terence Young, Conservative, Oakville, ON]

Their companies benefit....

[Alex Johnston]

Yes.

[Terence Young, Conservative, Oakville, ON]

What relevance is there to the social circles of private schools, Ivy League schools, and family connections with regard to holding women back who are talented, but don't benefit from those connections?

[Alex Johnston]

That's a complex question. I frankly don't know.

I would speculate there is certainly an advantage to building influential networks, but what we see in companies is building a network. You could start with great talent and advance. You need to be building a network. So whether you bring influential people from your previous experiences with you through life, building networks in your company matters, and building networks with senior people in your company matters, but I don't know how much of an impact—

[Terence Young, Conservative, Oakville, ON]

If publicly traded companies had to have independent directors, say, on a board of 12 you had to have two or three—

[The Chair, NDP, Hélène LeBlanc]

Yes, very quickly....

[Terence Young, Conservative, Oakville, ON]

—would that increase the possibility that there would be more women on corporate boards?

[Alex Johnston]

Yes, 100%.

There's no reason whatsoever right now why companies couldn't just add a director, quite frankly. It's great. There's no magic to the number of directors you have.

[The Chair, NDP, Hélène LeBlanc]

That was a quick question, a quick response.

We'll now move to Ms. Crockatt.

The floor is yours for five minutes.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you very much to all our witnesses.

I'm finding this testimony today quite fascinating. Alex, in particular, I was so captivated with what you were telling us because it looks like you're providing some solutions. We're looking for some solutions and some economic leadership for how to improve the prosperity of Canadian women.

I particularly like the fact that you're talking about some things that have worked. One of the things I'd like to know, though, is what is the business case? It's great to say we would like to see more women higher up in corporations and more, but we know that these decisions are often driven by economics. My understanding is that there is a sound economic case for them. In fact, I worked for Southam newspapers and they realized their circulation was declining at one point because they weren't attracting enough women readers. They looked around and saw that most of the editors and publishers were men. They decided to make a very significant change to that. They did put in place practices that dramatically increased both the number of women in those positions as well as their bottom line.

Can you tell us what is the business case? What do companies need to hear in order to be spurred to take the actions that you're talking about?

[Alex Johnston]

The business case is solid. We've done research, McKinsey has done research, Credit Suisse has done research, and it's all coming to the same conclusions. The “why” is not well established, but the “what” is well established. Companies with more women at the top on average outperform companies with fewer women. You have a connection between more women on boards within five years and more women on executive committees. We always say higher employee engagement scores when you really have a diverse and inclusive workplace, that makes sense. Making sure you're comfortable bringing yourself to work and feeling comfortable being who you are matters to how you perform at work and how you feel at work.

We often say to people, reflecting your client base matters. The reason that Muhtar Kent, the CEO for Coca-Cola, became so fixated on women was that he said 80% of purchasing decisions were made by women but this was not reflected through the ranks, so over the course of time there was no way they could continue to be a successful company if women weren't developing products and making decisions. Not reflecting their customer base was going to catch up with them, so they had to start changing that now because it would take time to do so.

In terms of core values, what we see is not simply internal change—when you really have a diverse and inclusive workplace that benefits employees and higher employee engagement scores—if you reflect your customer base and your values speak to your client base, that is often reflected in better business performance.

In the Canada high potential report I tabled with you, we were very interested to see that in Canada alone two out of ten women leaving their MBA move right into the public sector—hospitals, universities, and government—to build their career. That is completely different from the rest of the world. What they're saying is that they want something that's connected to a mission. They want a sense of job security—although to some degree in government this has changed. They want to feel that the place they're working for reflects their values. Those are important things. Ultimately for business leaders, you want the best people in the best places. If right out of the gate you're losing a whole cohort of women, that's going to impact your bottom line.

[Joan Crockatt, Conservative, Calgary Centre, AB]

What would your recommendation be to this committee for how to actually leverage this if there's an economic imperative for companies? It seems there is a fairly significant gap because a lot of companies aren't getting it.

[Alex Johnston]

Yes.

I always frame it in my remarks as an economic competitiveness argument. Fairness resonates with some people, equal opportunity resonates with some people, and economic competitiveness resonates with everybody. I think there are multiple things involved in this conversation. If you distill the research, the research is there and the business case is there. You start with the business case and you move out. I think you build an argument as an influential group of people about Canada. We bring people from all over the world here and we pride ourselves on a great education system. All that is very real but the stats are showing us very clearly that we're not doing nearly enough with that. We talk the talk—

[Joan Crockatt, Conservative, Calgary Centre, AB]

What should we be doing?

You mentioned the women's advisory council led by Kellie Leitch. I think you said you loved it. Why do you like it? What should we be focusing on now in order to leverage this economic imperative?

[Alex Johnston]

I'm on it, so I have to like it. I do like it. She's a very good chair.

I think the way I view that is as an influential platform. I think government in particular can use its influence as a convenor to the point of independent directors. Yes, that can make a difference because it creates spaces, but you need shareholders to be demanding diversity among those directors.

I think if you as a convening body can start bringing the right people to the table and having this conversation, such as the Canadian Council of Chief Executives and investor groups, these are important people who shape the conversation. I think we need to make sure they're fully engaged in the conversation.

Executive search firms in the U.K. are developing a voluntary code. In Canada we're trying to figure out how to have the conversation. I think you can be influential in helping to drive a conversation around economic competitiveness that really matters—

[The Chair, NDP, Hélène LeBlanc]

Thank you very much, Ms. Crockatt.

Mr. Casey, go ahead for five minutes.