Evidence of meeting #47 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was board.
A recording is available from Parliament.
Liberal
February 16th, 2017 / 9:25 a.m.
Vice-President, Policy, Institute of Corporate Directors
I want to think this through. I think it would be good to track those numbers. We come at it from the perspective that the first order of business is to achieve greater gender balance on boards, right?
Liberal
Chandra Arya Liberal Nepean, ON
Now, Paul Schneider, who is the head of corporate governance of the Ontario Teachers' Pension Plan board, told the committee that he would like government to give some sort of direction on what it means beyond gender diversity.
Do you agree with that?
Vice-President, Policy, Institute of Corporate Directors
Listen, I think Teachers' has a significant number of holdings. At the end of the day, if that's what they want to see from their holdings, that is completely appropriate, and if they think the Government of Canada can help in that respect, that would be helpful for them, and I think it would probably be helpful for the market to have a better understanding of that, yes.
Liberal
Chandra Arya Liberal Nepean, ON
I want to know the position of the Institute of Corporate Directors in this field, other than gender diversity, which is a noble cause we all agree with.
Vice-President, Policy, Institute of Corporate Directors
Yes. We've said that diversity goes beyond gender, and that is beyond question.
Vice-President, Policy, Institute of Corporate Directors
It can include ethnicity. It includes age and experience, obviously, and geographic diversity. But we also think that, given how poorly Canada has performed on the gender front, that's the first order of precedence.
Liberal
Chandra Arya Liberal Nepean, ON
No, we are not talking about gender diversity here.
You mentioned geographic diversity and age diversity. Is that what you are limiting yourself to?
Vice-President, Policy, Institute of Corporate Directors
I haven't limited anything. Those are just examples. I'm not sure what other categories you'd put in there.
I think it's important for boards to essentially compose themselves in a way that reflects the market they're trying to serve.
Liberal
Chandra Arya Liberal Nepean, ON
Thank you.
Mr. Dhir, you just heard Mr. Fortier's, I would say, lack of definition. I think he is trying to limit himself to certain things and not go beyond that.
What do you make of that?
Prof. Aaron Dhir
I have tremendous respect for the work that ICD has done in this policy space and I think ICD has been a real leader.
One of the most poignant moments, for me, going through the regulatory process with the OSC and also participating as an expert in the OSC process, was when the former director of ICD, Stan Magidson, stood up and said quite frankly that ICD supports a disclosure rule, because they did take it to their membership that they need to increase diversity on a voluntary basis, but unfortunately it didn't take. I thought that was a tremendous example of honest leadership.
I would also note that in the comment letters that were submitted to the Ontario Securities Commission on the proposed diversity disclosure rule, I believe—and certainly Matthew can correct me if I'm wrong—ICD did come out in favour of a more holistic definition of diversity, actually along the lines of the definition that you are suggesting, Mr. Arya.
Liberal
Chandra Arya Liberal Nepean, ON
Thank you.
Tanya, the last question is to you.
Do you think that the number of women on boards should be increased? We all agree with that. Do you think it has to be much more beyond that? For example, in Toronto, 50% of the population is women. At the same time, 50% of the population belong to racialized minorities, so is replacing a white man with a white woman the limit, or should we go beyond that?
Executive Director, Catalyst Canada Inc.
I think we should go beyond that.
Liberal
The Chair Liberal Dan Ruimy
Thank you very much.
We're going to move on to Mr. Dreeshen. You have seven minutes.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much, Mr. Chair.
Thank you to all of our guests this morning for the very interesting perspectives that you've brought in. We've heard many of these.
First of all, Tanya, I'd like to mention a couple of things. I've had the opportunity to attend meetings in Central and South America, where they talk about having more women as politicians and political people. When I was down there, Canada at that point in time had between 80% and 90% of its population being governed by female premiers.
When we take a look at that, there are many in the business who say they didn't get there by quota, they got there by talent. There's always that argument.
You talk about sponsorship and mentorship. How can you advocate and how do you advocate for women so that they are getting into a position where they can and will be selected? We see that it happens at the political level, but I know that the question we're dealing with here is the corporate level. How can we see that same success at the corporate level as we see at the political level?
Executive Director, Catalyst Canada Inc.
Let me make a distinction between sponsorship and mentorship. Both are very important in the development of anyone's career, whether it's in the political sphere, the corporate sphere, or the not-for-profit sphere.
When you have a mentor, that mentor will talk to you and coach you and give you advice and counsel. A sponsor talks about you. A sponsor will put their hand in the fire and advocate on your behalf when you're not in the room.
What we have found through many years of research is that men have many more sponsors. Women have many more mentors. Why is that? It's because the top levels of management tend to be men. I think as humans, we look for people like us, so men sponsor men. If there are no women at the top, then men sponsor men.
How can organizations do better? Right now we're trying to create a national conversation about this with an initiative called #GoSponsorHer, in partnership with Deloitte and McKinsey. People need to be very intentional. Senior leaders, men and women, need to say, “Who am I going to sponsor and advocate for and progress the career of? I'm going to put my own reputation on the line and pull them up the organization.” That's what we are asking people to do.
Does that answer your question?
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Yes. Thank you very much.
Matthew, you had mentioned, and we've heard this number before, that there are 3,500 women who are in this pool who we can look at. How many men would be in a similar pool?
Vice-President, Policy, Institute of Corporate Directors
The 3,500 number is just in our pool. The total number of people in that register is 8,000, and we have 12,000 members. Roughly one-third of our members are women, and of the 3,500 number, those are people who have asked us to help them find a board position if one is available and suits their capabilities. A thousand of them are people who finished the director's education program, which is the leading education program in Canada.
There are probably 3,000 men who finished the program and a 1,000 women.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
When you look at your board diversity policy, the template that you've shown here, you've done two things. First of all, you've looked at 30%, at least, which kind of fits the number you've presented. The other thing that you've mentioned, which we haven't seen, is a timeline. That has been one of the discussions that we've had here; that is, when can we see the metrics and what can we measure from this, rather than just a “Yeah, we'd like to do better”.
In this you've outlined 2021. I'm sure, as a template, people can adjust this however they choose. Why did you choose those numbers? Were you simply looking at the pool to make that decision, or did you have other thoughts?
Vice-President, Policy, Institute of Corporate Directors
The template you have before you is something that I filled out. I think 30% is something that we should be looking to achieve in the near to mid-term, and 2021 fits in that term.
If you go online and you look at the template, you can choose. You could say that you're going to achieve 5% by 2050, but that's obviously not acceptable. The point of the template was to recognize that not all companies are created equally and that not everybody can get up to those standards by 2020.
We're trying to help companies understand that diversity is good, that it will help their business, that it will help them to innovate, and also to help the provincial regulators and the federal government, now through the CBCA to achieve better results.
We had a webinar two weeks ago with the head of the Norwegian institute who pushed through the quota system there and with the chair of the OSC. We talked about what happens next if we don't get the results, organically, as we called it. What is the next lever here? Nobody wanted to put a time frame against it, but I think we all agreed that it's in the mid-term. Nobody wanted to use the word “quota”, but it's on everybody's mind.
The next iteration could be something like mandatory policies. I don't think anybody is discounting any options, because this is something that has to happen. We'd rather see it happen organically.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
The other question I have, and you mentioned this, is about the skill sets that are required for the directors. If you brought somebody in that has that legal component you require and they leave, you need to replace them with somebody.... That's a position that has to be done. It's the same situation, whether you are using accounting, or some political expertise, or people from the workforce. Those are other things that tie into the breakdown of your numbers.
When you do training, are you actively pursuing those individuals who are representative of the skill sets that are needed?
Vice-President, Policy, Institute of Corporate Directors
Absolutely. We market this to as many professions as possible and to as many backgrounds as possible.
What we say around diversity, whether it's gender diversity or any other kind of diversity, is that it's performance, not conformance. We would never expect a board to put somebody on the board, just because. You have to have the skill set. If candidate X has that skill set and fits the male profile, while candidate Y doesn't have that skill set, clearly you should put candidate X on the board. However, we firmly believe there are many candidate Ys with the skill sets out there.