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A woman's place

December 1, 2015

Suzanne Labarge knows what it’s like to be a female director in a male-dominated corporate world. The former Vice-Chair and Chief Risk Officer of Royal Bank of Canada sits on the boards of Coca-Cola Enterprises and Irish insurance company XL Group plc, and she is Chancellor of McMaster University in Hamilton, Ontario. Labarge has also served as a director of Deutsche Bank AG and U.S. aluminum product maker Novelis Inc. Labarge spoke with Up front at the National Club in Toronto about the importance of gender diversity at the board level.

Why are governments so concerned about having more gender diversity on corporate boards?

I think it’s complete frustration on the part of governments that despite all the steps they’ve taken, they have not seen women rise up in the corporate world. And there seems to be a view that if you put more women on boards, they will act as a catalyst for moving women up within corporations.

Why are boards moving so slowly on gender diversity?

Because there’s no diversity at the corporate level. It ends up being the chicken and the egg. Having been on search committees for women on boards, you’re normally looking for somebody who’s either been on a board or has been in situations where they’ve had exposure to a board and know how a board should work. And the problem is, we’re seeing very little at that level still in corporations, which means that in a lot of cases, people have reached out to what I would call non-corporate areas, which works for some industries but not quite as well in other places.

So, some industries are moving more slowly than others?

It’s hard to say. I’m lucky I’m on boards where there is a fair amount of gender diversification. I would think that some of the big manufacturers find it harder if they’re looking for industry expertise for pure manufacturing.

Why is it important to start at the top?

Boards, if they are doing their job properly, are involved in succession planning. They can drive succession planning below the CEO level down to the operating level, which is where the next generation of leaders is coming from. They can ask to see people at the board level and see how they perform. 

If you’ve only got men on the board, they tend to revert to “Let’s talk operations only,” because they like it. I think the idea may be that if you get diversification, women will have more of a tendency to try to look at succession planning and to get the board to discuss it from a different perspective than they currently do. 

Do women tend to think more strategically?

I know a lot of women who are purely operational, but they are more conscious of the fact that succession planning is where the women are going to come from. And if they are committed to diversity – and I have to say I’m not sure all women are – they will push that element as they look at it without giving up the fact that what you still want is top-quality people to be in whatever job you choose.

Are you in favour of quotas?

Looking at diversity, no, I don’t like quotas at all. I’ve been in worlds where there are quotas … I think the Norwegians started it off … and there were a group of women known as the Golden Legs because they were on 25 boards. You end up with a small pool to choose from … so you may not get what you want.

How do you go about getting more women to be considered for board positions? 

It’s the terms of reference we give to headhunters or the nominating committees themselves, so that as recommendations come forward, women and minorities are always on the list. We say, “Tell us what’s out there, and then we’ll take a look and see whether there’s a fit or not.” Trying to get the fit is quite often very difficult, but those are things that are always considered. 

In a lot of cases you might say, “We are really focusing on only women this time – give us a list of all the women you can find so we can look at the pool of women.” And there’s been some very conscious decisions in the boards that I’m on to say, “The next director or the one after has to be female.” It’s much easier to do in a bottling company like Coca-Cola, because it’s also marketing company, than it is in the financial services world, where you need a very different and much more stringent set of skills to be comfortable on the board. 

How do organizations benefit from having more women on their boards?

There are number of benefits that come. One is that it changes, in a very subtle way, the dialogue at the board. There’s something about a group of men versus a mixed group just in terms of the language, the conversation, the focus. 

It will be interesting to see how this changes as there are more women on boards, but right now I would say the women that are on boards quite often have been one of few women at their level in their organizations, and they have learned to live with being an outsider. So they are actually far more prepared to ask the hard questions. And the men on that board are really glad that they’re doing it because, although they know the questions should be asked, they’re not prepared to rattle the cage. So I think sometimes what you get is a dialogue on different issues because women don’t feel they have to be part of the cozy little group.

What kind of hard questions are we talking about? 

There are hard questions that have to be asked all the time that nobody wants to ask, and I’m thinking of ones particularly around CEOs. I can think of an example of a not-for-profit board that I was on where nobody liked the CEO, and they kept talking about him being no good. Finally I said, “We have to either give him endorsement so he can do his job or we’ve got to say we’re getting rid of him.” Everybody knew it was the right question, but nobody wanted to be the one to put it on the table. It’s group dynamics. There are very few men I know on boards who are prepared to be the person who will ask that hard question.

Do you think diversity is becoming more important now that globalization and technology are forcing companies to become more agile and less traditional in order to survive?

Yes, it’s very important in today’s changing world to bring more perspectives to the table. But I’m not sure that women alone are part of that perspective. You’re looking at a broad range of skills for where you think your strategy’s going because the composition of your board needs to reflect your strategic direction. Gender diversity is really only one part of the kind of diversity you’re now looking for. It’s really making sure that you have diversity in all elements, whether it be in some cases racial or international. 

But the far biggest thing for a board to take a look at is do you really have all the right set of skills. And secondly, can a person work within the board effectively? The dynamics of the board is quite often what makes it effective or ineffective. Having diversity within an effective board makes it a very effective board.

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