Tapping into diversity: women on boards
Commodity price fluctuations, productivity challenges and a lack of access to capital are just a few of the risks increasing the pressure on executive teams in the mining and metals sector. New challenges and new dilemmas need new solutions. Executive teams can benefit from directors who bring new and challenging perspectives and ideas gleaned from their own experiences. If done well, this can create a real strategic advantage.
We all know it’s not enough to continue with the status quo. And we also all know, changing is far easier said than done. But it must be done and it needs to start now. While to access diversity of thought requires one to access difference that goes beyond just gender, the inclusion of women is the equivalent of the canary in the coal mine. If we cannot get it right for 50% of the population, we probably won’t get it right for other aspects of diversity.
Studies show that boardroom diversity ignites innovative thinking, improves problem-solving and, often times, enhances competitive advantage. Yet, despite the advantages of diversity, representation of women on boards shows little improvement in Canada. In 2013, the Ontario Securities Commission (OSC) surveyed 1,000 TSX issuers. The results revealed that the level of representation of women on boards and in executive officer positions is extremely low: 57% of respondents had no women directors, only 28% had one woman director and just 3% had a woman chair of the board. That puts Canada behind the US, UK and Australia when it comes to diversity in the boardroom.
Research also shows diversity in the boardroom is particularly low in the mining and metals industry. According to Global Mining Standards and Guidelines Group, the industry has fewer women on boards than any other major industry, including oil and gas. The usual argument is that women are not well represented in the engineering and geology fields. While this may be true, management can benefit from a board which includes industry experience, but also has directors with experience outside the industry.
Investing in the sector’s future demands a proactive approach to diversity at the boardroom level and in the C-suite. Creating a culture where diverse talent thrives is not about quotas, but it still requires a disciplined and thoughtful process to drive change. It’s also no longer voluntary — the OSC has enacted “comply or explain” regulations (taking effect on 31 December 2014) that require companies to set goals for the percentage of women on the board and in the executive.
Canadian mining and metals executives should consider the following five key elements in a successful strategy for driving real change:
Leaders act: make an authentic and visible commitment
- Tone from the top means the chairperson or nominating committee chair must advocate for better female representation and take action if the plan is not working.
Leaders track progress: set measurable goals to move the needle
- Goals must be clear and specific to each individual board, depending on where they start and what is relevant to their shareholders.
- Check progress at regular intervals and analyze why a tactic has or hasn’t worked.
Leaders challenge assumptions (their own and others): understand barriers/biases and address them through an action plan
- Build transparent nomination criteria and selection process (including a skills/experience matrix and competency gap assessment).
- Develop a policy with goals, principles and timeframe and create a robust board succession plan.
- Assess criteria for board positions and reconsider any strict policies that require CEO experience.
- Whether the search is managed internally or by a search firm, ensure it is extended beyond the traditional to consider those with operational, public sector and not-for-profit or other leadership experience.
- Actively encourage women to apply.
Leaders celebrate: recognize and reward positive behaviours
- Identify ways to acknowledge progress in a manner that works for the board. For example, communicate progress to management or externally
Leaders ensure sustainability beyond themselves: embed inclusiveness practices into critical board processes
- Ensure leading practices are written into the board’s process, charter, mission statement etc. to help embed inclusiveness into the culture itself.
Moving forward
Mining and metals companies can no longer ride the commodity price wave. Addressing today’s business challenges requires meaningful change. That includes embracing diversity at the boardroom level. There are a number of tactics mining and metals boards can take to harness the power of diversity at the boardroom level and set their organization on the path to success. The time to start is now. CMJ
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