Status of Women Committee on Feb. 9th, 2017

[Sean Fraser, Liberal, Central Nova, NS]

Thanks very much. If I have time, I'll come back.

Mr. Nesbitt, I'd like to touch on a few of the issues you mentioned with respect to boards. There's some very interesting information you described for us on the impact women can have on boards, and the role of men sitting on boards, to enhance diversity. From the federal government's perspective—forgetting, for the moment, crown corporations and government agencies—is there something we can do to encourage the private sector to make those decisions rather than just tell them it's in their self-interest to do it?

[Prof. Richard Nesbitt]

The Ontario Securities Commission has a comply or explain at a 30% level for women on boards, which I think is a very good first step in terms of getting to the root of this issue. That's had a material impact on the number of women on boards, although a lot of companies are still not complying. I think 45% of public companies on the Toronto stock exchange still have no women on their boards.

That raises the issue of quotas. In the public sector—and I, of course, believe in markets—there's a lot of evidence on what happens with quotas. The greatest case example is in Norway, where they imposed a 40% quota on boards. What happened, unfortunately, was that after they imposed the 40% quota that boards had to comply with, half the companies delisted from the stock exchange and became private companies. The quota had only applied to public companies.

You want to avoid the unintended consequences. Quotas also demean everyone on the board and every candidate on the board because you don't know whether you're put on the board because of a quota or not. I think it's far better to lead by example and encourage the people who are supportive—and there are quite a few men and women—and support those people by leading through example.

I'll go back to the crown corporations and agencies that are in direct control of the federal government. Look at the gender composition of those.

[Sean Fraser, Liberal, Central Nova, NS]

Thanks very much. I think that's a great place to start. I just want to make sure we get the maximum benefit from this kind of a sea change.

We've heard from a number of witnesses, including you, about the educational advantage that women have at the undergraduate level. Is there something you think the federal government can do to take advantage of that competitive advantage women have at the early stage of their education and translate that into success in leadership positions beyond that middle management role where we seem to lose a lot of talent?

[Prof. Richard Nesbitt]

Again, leading by example would mean that, anywhere the federal government is providing money to any institution or any industry, there should be a requirement for achieving gender parity or near gender parity to get that money. The markets are very important. If I can only get that money at a university, I put forward candidates who are gender-diverse and near gender parity, then you can bet that's what people will do. If you don't have that requirement, we see the other witness telling us that's not what's happening.

The other thing, again, is leading by example, and continuing to promote in federal agencies in a gender diverse way so more women reach the most senior positions. Those women will then sit on boards, and this will result in a virtuous circle. It's pretty clear that women tend to hire more women in companies where they are underrepresented; therefore, you want to generate this virtuous circle.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much.

[The Chair, Conservative, Marilyn Gladu]

We'll go to the second round of questioning of five minutes, starting with my colleague, Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Ms. Chairman.

Professor Nesbitt, I'll begin with you. I was a board chair for a $4 billion financial institution for 17 years. That is a board of nine members currently, three of whom are women. One of the things we often did was to put matrices together in conducting our searches. From your perspective, what kind of weighting would you put on gender versus qualifications? What would be your opinion on that?

[Prof. Richard Nesbitt]

I wouldn't give up qualifications for gender. There's an irony in that: you don't need to do that. There are plenty of qualified women in the marketplace. You may have to look a little more broadly than business schools or former CEOs, because fewer than 5% of CEOs are women. Therefore, if the criterion is that you must have been a CEO of a public company, you're not going to find many women.

What about a president of a hospital? What about a president of a university? What about a president of a cultural organization? These people have tremendous experience and qualifications. I would venture to say that they have equal or better qualifications than some of the men. At three out of nine, you had achieved that magic 30%, and so you theoretically should have been seeing the benefits of that. You could have had more benefits if you had gone closer to 50%.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

You've talked a little about some of the barriers to attracting women into that particular area of work. Do you see anything positive happening in the marketplace today?

[Prof. Richard Nesbitt]

It's actually very positive. It's slow in some cases, but very positive. We know that the banks have achieved their 30% target quite readily in terms of gender diversity. They should start to see the benefits of that now. We have the “comply or explain” legislation at the Ontario Securities Commission for public companies. There are more people who are thinking and talking like me. I have associates from the industry and I'm not the only one who thinks this way in terms of men. They're actually out there actively promoting and sponsoring. I would say we're at the beginning of a crest of a wave of change in this area over the next 10 years.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Professor Cohen, I'd like to ask you a few questions. You talked about having women more involved in the trades. I own a heavy construction company. We hire equipment operators; we hire labourers. I don't get a lot of women applying for those types of positions. Can you maybe just explain that a bit?

[Prof. Marjorie Griffin Cohen]

I'm not surprised because there is a weeding out that begins right at the apprenticeship level—and obviously not for labourers. You have a hiring haul. You have to go through the whole thing where they're lowest on the list; they don't get out. It's very difficult—that is, if you have a union in your company. If you don't have a union, then I don't quite know what your hiring process would be. However, it's extremely difficult. Particularly for electricians, plumbers, other kinds of buildings trades, carpenters, a lot of women go through apprenticeship programs. They can't get paid apprenticeships. That discourages them, or they get them with very, very low wages, less than what the guys are getting. More and more of the building trades aren't unionized now, which becomes problematic as well.

So, there are all kinds of barriers that would prevent you from having people hired there. You could be proactive, if you wanted to be on that, because there are institutes that train women, that are always looking for places to have an apprenticeship held. That's a hard thing for women to get, on-the-job apprenticeship.

[Ted Falk, Conservative, Provencher, MB]

We have hired women as truck drivers and equipment operators, and our industry is certainly seeing more women entering that area of work. As far as operating the equipment goes, they're very capable and just as skilled as anybody else, but the problem we sometimes encounter is that once they actually have the position, they often want special consideration when it would comes time to shovel out a box of gravel when there is some left that didn't come out when you dumped. They don't think they have to do that, and they think somebody else on the crew should do that.

[The Chair, Conservative, Marilyn Gladu]

You're out of time.

We're going to Ms. Damoff for five minutes.

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

Thank you both for being here.

Mr. Nesbitt, I want to talk a little more about boards. We have a bill before Parliament right now dealing with diversity on boards. It is the “comply or explain” type of model that you had mentioned. When the Ontario Securities Commission talked about “comply or explain”, they only saw 1% increase in the number of women on boards. When that report came out, there was an article on the Ontario teachers' pension fund having called for three women on boards or the company would be delisted. That was their suggestion. You don't sound like you're a fan of mandatory quotas. It seems like “comply or explain” doesn't necessarily work. It's been used in Norway. You mentioned that it's also been used in France. Do you have any comment on that?

[Prof. Richard Nesbitt]

Yes, I would disagree with any view that you would want to delist a company. Delisting a company and taking it away from the transparency and governance of a public company is, on its surface, negative, so I would not see that as the....

Ontario Teachers is a major investor and shareholder. They have the right to invest or not invest in any company they want. That is a more effective solution to this problem. If investors—and they're starting to—begin to understand that companies that are more diverse in their leadership perform better, they will move their money to companies that are more diverse. That would be the greatest impetus for boards and CEOs to change.

“Comply or explain” is a good step because people should be accountable. Unfortunately, what happens is that lawyers write the “explains”. If you try to read some of the explains, they're clearly written by lawyers, and there is no explanation other than they've complied by explaining.

This demonstrates the problem of trying to force people through law to do something they don't really want to do. You want to get them in a position where they want to do it. They want to do it because it will improve their company and their financial performance and so they can continue to receive funding for research from government. They want to do it because the government owns the company and is telling them to do it, and they're the shareholder and have a right to tell them to do it. That to me is a better path.

“Comply or explain” is a good step—I'm not saying it isn't—but don't expect that to change things materially. The marketplace is going to change it.

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

What about targets? Do you think we should have targets for what we want to see?

[Prof. Richard Nesbitt]

In terms of the federal government having a target—and I must say Prime Minister Trudeau's approach to this in his government has been very encouraging, but that only goes so far—it's good to lead by example.

I have my own target for anything I run. I attempt to achieve 50% gender parity because I believe my company will run better as a result. I run a research institute today called the Global Risk Institute, which is 50%. I think targets are very good. Every CEO should have targets, not just at the top but at every level of the organization. Every board should have targets.

I think the government can lead by example, by saying their targets throughout the universe of everything they control in the federal government universe has a target of 50%.

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

I like hockey, by the way, so I wouldn't have a problem going to that. In my riding all the girls with the Oakville Hornets would quite enjoy that as well.

When I went to a dinner last year that Catalyst held, and spoke to the head of General Motors, who said the same thing that you do, that it's good for business having women in leadership and on boards. Why isn't that message getting out? The people who are doing it know that it affects the bottom line, but it just doesn't seem to be resonating with the 45% of companies that don't have any women on their boards.

[Prof. Richard Nesbitt]

The answer is that it's starting to get out. Catalyst has done a good job in making sure that large companies are doing something about it.

I think you can split men into three different groups: the 20% who are very active in sponsoring women, who believe in this, and are doing it; the 20% who don't believe it, aren't going to do anything about it, and who today often occupy positions of power; and the 60% in the middle. To the men in the middle, it's they're okay with it, but they don't know what to do and don't know that it's their responsibility. We're saying to those 60% of men that it is their responsibility.

I would say to General Motors, since they believe it, let's see their actions. What does their board look like, their senior management, the hierarchy of their management? By the way, General Motors has done some really good things, as have many corporations. I think that progress is happening; it's slow for some people, though.

[The Chair, Conservative, Marilyn Gladu]

That's excellent.

All right. We have time for one last five-minute question, so Mr. Falk, you could get an answer to your question.

[Ted Falk, Conservative, Provencher, MB]

Great, thank you, Ms. Chairwoman, I'm going to do that.

I'm going to go back to Professor Cohen and just say, re-ask the question. We would hire women for—

[Prof. Marjorie Griffin Cohen]

Yes, I heard it.

[Ted Falk, Conservative, Provencher, MB]

—truck driving positions, and they didn't always want to do the whole job. We paid them the same.

[Prof. Marjorie Griffin Cohen]

I do want to say that this is the kind of thing that was heard at the beginning of the Vancouver Island highway, and afterward the employers and the unions were both very, very happy with what had happened. The women got hired and the company was happy to hire them afterward; so I don't know, maybe you got one lazy woman, maybe you heard the story wrong, or who knows? But whatever was going on, this is not necessarily what happens all the time, and women aren't necessarily the laggards.

I do want to say one other thing. We do have employment equity legislation in Canada, and that's something to remember for the federal government. We used to have the power of the contractor's compliance program in that everyone who worked for the federal government, who had a contract, had to have some indication of what their equity program was going to be. Now that did fall into abeyance, but it is something that could be brought forward again, and it's a very, very important tool, so that if the government is spending a lot of money and is paying somebody to do something, it can be sure there is some kind of accountability with regard to equity for all the people protected by the human rights legislation.