Canadian Financial Firms Overwhelmingly Favor Men Versus Women On Corporate Boards - A Surmountable Challenge?

Women are much less likely than men to serve on corporate boards in Canada, a new study finds.

Canadian financial firms have done a better job of representing women than do retailers, manufacturers or energy companies, and yet a survey by the Canadian Board Diversity Council (CBDC) finds that finance and insurance firms' corporate boards are more than 80 percent male dominated today.

It's a lot worse in other businesses, according to the organization's second annual "report card," which reflects the responses of 400 directors in Canada's largest corporations and charities. A total 164 of those responses came from chairs and directors of Canada's largest finance, retail, manufacturing, energy and utilities companies based on assets.

One in five board seats in utilities, finance and retail trade sectors is held by a woman, according to the study. In manufacturing, the figure is one in 10 and in mining, quarrying and oil and gas, a more discouraging one in 15. The survey covers both internal and external corporate directorships.

The underlying problem is that women don't have the traditional networks in place that their male counterparts do, says Janice Detta Colli, a Boyden managing director in Toronto heading the recruiter's financial services practice in Canada.

The old-boy's mentality is still alive and well in this regard. "C-suite level women aren't being approached as often to be on a board because they don't have the personal networks in place that men do," says Detta Colli.

When a board is looking for a new external member, someone else with a seat will usually refer a friend whose credentials fill the bill, and normally it's another male, she says. Where internal directors are sought, there aren't enough C-suite women to choose from, she says, so "it's a double whammy for women."

The latest study-which was produced in association with KPMG, The Conference Board of Canada and The Beedie School of Business-did unearth some positive findings with regard to financial firms' commitment to recruiting a diverse slate of external directors:

When those companies retaining recruiters to find directors were asked whether their board's mandate to the search firm directs that "the short list of potential directors must include diverse individuals in terms of gender and/or ethnicity and/or Aboriginal background," financial firms have progressed beyond the energy, mining and manufacturing sectors.

A total 43 percent of finance industry respondents that employ recruiters in the process of choosing external board members also indicated that they "always" request a diverse slate of candidates, with 39 percent answering that they sometimes make such demands of recruiters, 4 percent saying they never do and the rest admitting they weren't sure. Retailing did just slightly better than finance in this regard, but most other businesses "always" seek diverstity from recruiters scouting board members 23 percent of the time or less.

Most of the finance executives responding said they sometimes (33 percent) reach out to recruiters, and about a fifth (21 percent) saying they always tap recruiters when on the lookout for board members.

Meanwhile, other findings include:

- A majority (59 percent) of corporate board members across five different industry sectors continue to oppose the development or adoption of a formal diversity policy.

- Among financial firms surveyed that haven't adopted a written policy, 77 percent oppose the notion of their board developing and implement one.

So, what's a female executive to do? Detta Colli makes the following recommendations:

- When female executives are networking (i.e., doing performance reviews or talking to mentors), they must "put it out there" that they want a board seat.

- Another step to consider is to seek the Institute of Corporate Directors ICD.D designation, which among other things covers the liabilities and risks of taking on a directorship, says Detta Colli, who will soon be seeking the certification herself. Those without corporate sponsorship will need to make a serious investment, however, as the ICD training runs into the five figures, sources say.

- Another educational program to consider, offered by the CBDC itself, is known as Get On Board. Here, educational programs are broken into three parts with the introductory level open to those with little or no board experience, and costing perhaps $700 to $800 for about 13 hours worth of study over the course of six to eight weeks.