No women in the boardroom? It could be hurting your bottom line.
Canadian businesses need to change the way they find executives and board members to tap into the benefits of having women on board.
A Harvey Nash survey released this week shows board-level executives thought having women on company boards contributed to emotional intelligence, better board consensus and more creativity. A 2011 Canadian survey showed women make up just 14.5 per cent of Canadian board – an increase of just 0.5 percentage points over the two years from 2009.
“The numbers are disappointing,” said Deborah Gillis, vice-president of global operations at Catalyst, which lobbies for equality in leadership roles and ran the 2011 census. “Over two years there has been virtually no change. Especially when we consider the research from Catalyst and other organisations that shows more women in leadership, including more women on boards of directors, is good for the performance of organisations.”
Companies with more women in leadership positions did better financially, she said. Financial Post 500 companies with the highest representation of women in senior officer, executive roles and on boards have 16 per cent higher return on sales and 26 per cent higher return on invested capital compared with those with the lowest representation of women. The companies with more women in executive positions also had returns on equity that were higher by 35 per cent, and returns to shareholders were 34 per cent higher.
“That’s a lost opportunity for businesses in Canada,” Gillis said. “There is a clear and compelling business case for more women on boards and in leadership in Canadian organisations that makes the slow pace of change particularly disappointing.”
Catalyst has set a goal to increase the presence of women in these upper roles to 25 per cent by 2017 and has called for companies to join an accord to try to improve those figures.
“Diversity of perspective, of experience, of point of view around any decision making table will lead to different conversations to different ways of looking at problems, to innovation,” Gillis said. “Ultimately it will bring change to those conversations that we think is good for organisations. Diversity well-managed is good for organisations.”
Over 46 per cent of public company boards in Canada have no women directors. The commonly given excuse was that there was not a large enough pool of women candidates to tap into. Catalyst had put together a list of “board ready” women to help companies find suitable candidates.
“The starting point really needs to be looking the skills and the competencies that are currently on an individual board, what skills and competencies are needed to help support good corporate governance and then looking to a broader pool of candidates to identify potential directors,“ Gillis said.
“To say in 2012 that there aren’t qualified women to serve on corporate boards in Canada simply doesn’t hold water.”