Breaking that elusive glass ceiling
TheStar.com – comment – Breaking that elusive glass ceiling
January 31, 2008
Jasmeet Sidhu, Community Editorial Board
It’s a feminist’s dream come true.
On Jan. 1, while most of the world was celebrating the arrival of another year, Norway celebrated (or bemoaned, depending on who you talk to) a new law coming into effect requiring nearly half of all seats on public corporate boards to be held by women.
Since creating legislation in 2003 forcing public companies to ensure a 40 per cent quota for women on its boards (and giving companies five years to comply before it became law), Norway now leads the globe in gender equality at the board level, with more women in the upper echelons of decision-making circles than any other country.
According to the executive search firm Rosenzweig & Co., among the 535 most senior and highest paid positions in Canadian companies, just 4.8 per cent are held by women. A survey of all FP 500 companies in Canada last year found that only 15.1 per cent of corporate officers were females.
Although such gender-balancing legislation in Norway fascinates feminists like me, several questions crossed my mind after my almost reflexive approval of the news. Wouldn’t qualified women already be on corporate boards if they were truly deserving of the position?
And while the corporate glass ceiling for women is commonly acknowledged, is government intervention the best way to achieve change?
And really, why should women be included on corporate boards?
It would seem that laws like this only reinforce the notion that women are incapable of achieving leadership positions in large companies on their own merits.
Nomination committees that propose new board members are often made up of men. And while many highly qualified women can be found in candidate pools, the old dogma that we are more comfortable with those who are like ourselves can lead to men hiring other men. And outside these candidate pools women stand less of a chance, as they are often excluded from professional and personal networks that are used for informal hiring.
The results in Norway seem to indicate that legislation would help well-qualified women reach the top of their companies when they might have otherwise faced deep-rooted cultural barriers.
But why should companies even have women on their boards, forcibly or not?
Beyond the belief that “diversity is best,” many positive outcomes have resulted from including more women at the corporate level.
For the companies themselves, having women on executive boards makes good business sense. Women are a huge group of consumers, employees, employers and shareholders that companies shouldn’t ignore. Women’s interests, priorities and concerns are best known and represented by other women.
It has also been shown that having more women on corporate boards improves corporate governance. In May 2002, a study by the Conference Board of Canada found that more female than male directors pay attention to audit and risk oversight and control, consider the needs of more categories of stakeholders, and examine a wider range of management and organizational performance.
The findings also revealed that 72 per cent of boards with two or more women conduct formal board performance evaluations, while only 49 per cent of all-male boards do.
Perhaps most importantly, the presence of women might even improve profits.
A study published in the Harvard Business Review found that firms with women board members were much more likely than companies with all-male boards to be leaders when ranked by revenue or profit.
Although it has not been proven that women are a direct causal factor in improved governance or financial performance, there is a strong correlation between female numbers on boards and good governance credentials.
Even though many Canadians are still cautious about the idea of government-endorsed quotas for women on corporate boards, the situation in Norway brings hope to many women in the workplace seeking to finally break that elusive glass ceiling.
And perhaps one day explicit demand for female involvement in corporate boards won’t even be an issue, as women can hopefully be judged truly on their own abilities and not hindered in any way because of their sex.