Move mountains? Easy. Boost diversity? Oof!

It’s proxy season for many Canadian issuers, and that means the second year of “comply or explain” disclosure on diversity. In year one, mining companies lagged with the most male-only boards. Will anything change in year two?
By Brenda Bouw

Alex Johnston has seen a dramatic change in the conversations she’s been having about the lack of women leaders in the mining industry.

Five or six years ago, when the now former executive director of women’s advocacy group Catalyst Canada would raise the growing global issue with industry executives, the response was akin to “leave me alone.” Johnston, interviewed prior to leaving Catalyst for a new job in February, says the conversation started to slowly shift to, “of course I want more women in leadership positions—we aren’t opposed to it, there just aren’t enough of them.”

Today, mining companies are actively seeking names of qualified women for their boards and in the C-suite. “That’s a great transition,” Johnston says. “There are still barriers where people aren’t connecting demand to supply—there are more women out there than people are setting their mind to—but there are more people connecting the dots. The progress is real.”

Extra incentive: Board diversity can help miners deal with challenges, says Carleton's Clare Beckton

The momentum comes amid new disclosure requirements on women and boards and in executive positions in Canada, which took effect in 2015. The so-called “comply or explain” rules established by the Ontario Securities Commission (OSC), along with other participating provinces and territories, requires businesses to report annually on the gender composition of their boards.

A benchmark review released in the fall showed the mining industry, alongside companies in the technology and oil and gas sectors, has a long way to go to turn its talk into action.

According to the review of 722 companies as of July 31, those sectors had the most issuers without women—65% in the case of mining company boards, 60% in the others. The review also showed about 50% of issuers in the mining sector, as well as biotechnology and technology, have no female executive officers.

Huston Loke, the OSC’s director of corporate finance, says issuers across all industries are “actively working” to get more women on their boards and in the C-suite, but that many didn’t provide “the meaningful disclosure we expect.” Adds Loke: “We hope to see progress between this proxy season and next.”

The Ontario government’s recent nomination of Maureen Jensen, a key figure behind the “comply or explain” rules, to be the new head of the OSC signals the pressure to diversify won’t be letting up.

More women, more value

Studies show having more women on boards isn’t just good for show, but also shareholder return.

A 2013 study from the University of British Columbia’s Sauder School of Business found that merger and acquisition costs dropped by 15.4% for every female director on the board. UBC was also part of another study released in 2015 showing boards with women are more likely to seek outside advice on a takeover proposal, which reduces risk of costly shareholder battles.

The prolonged downturn in the mining sector should be an extra incentive for companies to seek out women leaders and board members, says Clare Beckton, founding executive director of the Carleton University Centre for Women in Politics and Public Leadership.

“This is a time when the mining industry is facing some huge challenges. You need that diversity on your boards to help deal with them,” Beckton says. “Women bring a different set of talents and capabilities to the table, which is not being capitalized.”

Beckton says “comply or explain” is a step in the right direction, and should force companies to rethink how they choose future board members. “You don’t want to be explaining all of the time why you aren’t doing what people expect,” says Beckton.

Would quotas be better?

While there is progress being made in Canada, some see the rules as toothless compared to countries like Norway and France, which have quotas requiring boards to have at least 40% female representation. Of course, quotas are controversial and many women and men in and out of the mining industry are against them.

Women in Mining Canada adviser Kelly Cooper: helping miners commit to change

“You want women to be selected because they’re the best candidate for the job, not because they’re women,” says Eira Thomas, president, CEO and director at Kaminak Gold Corp. (TSX-V:KAM) and a member of the Suncor Energy Inc. board, among others. “If you want to position women for success, they need to know that’s why they’re being selected.”

Adds Thomas: “I would be horrified if I found out that I was simply asked to join a board because I was a female. That would not serve my long-term career goals at all.”

Thomas and others believe the best way to boost the number of women leaders in mining is to encourage the next generation to seek careers in the industry, including through education in engineering and sciences. The strategy isn’t just about diversity, but also to help address a skilled worker shortage that is expected to worsen in the years ahead.

It’s the heightened concerns around these issues that led Kelly Cooper, a consultant and lead strategist for Women in Mining Canada, to develop a National Action Plan designed to get more women into senior executive roles and in the trades. Cooper has 12 miners on board, committed to change how their companies work with women in future.

“We are trying to get the change within the organizations to stay,” Cooper says.

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