Canadian Lawyer InHouse

April 2015 24 INHOUSE "What that tells you is this is not a problem with the pool," says Cukier. As we move toward more objective and systemic approaches — such as look- ing at skills matrixes — we're going to level the playing field, she says. And the comply-and-explain rules will encourage private-sector companies to reflect on the composition of their boards. "Shining a light has a huge impact on behaviour," says Cukier. But, she adds, it may not be enough. Some argue for more extreme measures such as quotas, but "sometimes if you push too hard you get more resistance." So it's not clear whether quotas work better than voluntary targets, she said. "The other piece is to really understand the business case for this," says Cukier. "This is not about political correctness, this is not just about compliance, this is about ensuring the governance of your organization reflects the people who work there and the people you serve." And research suggests organizations are more effective when they have leadership that is more diverse and inclusive. According to the DiversityLeads 2014 report, diversity on boards supports improved organizational performance: Companies with a higher percentage of women on top management teams and boards perform better financially, with higher sales revenue, greater number of customers, greater market share, and greater relative profits. It also provides stronger links to citizens, clients and cus- tomers, and helps attract and retain top talent. "Regulatory frameworks are impor- tant, but at the end of the day as Canada is becoming more diverse these sorts of things do hit the bottom line," says Cukier. "I don't know if anyone says we need to get two more women on [our] board because we're going to be more profitable," says Carol Hansell, founder and senior partner at Hansell LLP, who does board advisory work and sits on sev- eral boards. "I don't think that in most cases it's a matter of people being resistant to putting women on boards," she says. "The people making the decisions don't know enough women; their field of vision for people who they think can do these things doesn't include women." Boards are often thought of as an old boys' club, and when they need a new director they look for someone they've seen do this before, so it's self-perpetuat- ing. If they've never seen a woman do it, she said, they don't tend to consider them. "Governments have done a really good job of walking the walk . . . and they do it themselves by putting women on Crown corporation boards. I don't see that trans- lating into private boards, maybe because the private sector doesn't look to Crown corporations," says Hansell. But she's not sure how much longer we can carry on that way. "While it may be difficult for some peo- ple to come up with a woman to put on the board, they're now accountable," she says. "I think nobody wants [quotas] but there are more and more people being dragged toward the conclusion that they may be the only solution," says Hansell. "This is very, very slow progress that we're making." Indeed, there has been a lot of dialogue in the legal community about whether the rules have gone far enough. "I'm a believer myself in wait and see — see what is disclosed, see how that gets picked up and what the result of that is," says Dorothy Quann, vice president and general counsel for Xerox Canada and a member of the executive committee for the Legal Leaders for Diversity and the YMCA of Greater Toronto's Audit Committee, of which she is a past member of its board of directors. To bring more diversity to boards, the first thing that's needed is dialogue, she says. But there's a need to develop the pipe- line. "We need women in the pipeline to move up in [their] organization, and that's '' '' There's a natural tendency to bring on people you have a prior relationship with and that limits your pool, because for the most part you're excluding a large part of the population. riCHArD lEBlANC, York University Where do CaNadiaN boards staNd? O n one end of the spectrum, leaders in diversity already have policies in place, with fixed targets (usually in the range of 25 to 30 per cent) and a date by which they intend to meet those targets, says Longhurst. On the other end of the spectrum, some organizations have no diversity policies; perhaps the board is comprised of founders or stakeholders in the establishment of the company. Diversity may be one of several issues under consideration, but not the most pressing issue in terms of what they need to accomplish to create share- holder value. Many organizations are somewhere in the middle, looking to adopt a policy but not enshrining actual fixed targets. "What they do is acknowledge that diversity can be beneficial, that it's one of many factors in identifying candidates for a board, not just gender," says Longhurst. Setting a quota may not make sense until they do a closer investigation of existing policies and procedures.

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