Bridging the gender divide isn’t just a feel-good thing; smart companies know that diverse leadership delivers big returns
“I think it is ridiculous in this modern day that you could have corporate boards with no women on them,” offers Judy Steele, president and CEO of Emera Energy, an affiliate of Emera Inc. “I think it’s bad for business.”
Steele’s organization, a company with 250 employees, generates between $50-$100 million a year buying, selling and delivering electricity and natural gas for power plants in northeastern North America. Steele says she’s got “the best job in Atlantic Canada” even though she’s often the only woman in the room at energy investment banking conferences.
Emera Inc. and its affiliates are gender diversity outliers. Twenty-seven percent of executives at Nova Scotia Power and Emera are female, compared to the 15 per cent average at other Canadian companies on the TSX. One-third of Emera’s corporate directors are female (considerably better than the 13 per cent average among other publicly-traded companies) and Emera is one of very few to unanimously elect a woman as its chair.
Last July, it pulled off a $10-billion energy play. It bought an electricity company in Tampa, Florida and a natural gas distributor in New Mexico. As Emera’s vice president of Mergers and Acquisitions, Karen Hutt helped seal the deal. In August, the Truro, Nova Scotia native was elevated to president of subsidiary company, Nova Scotia Power.
Hutt is the first woman and first non-engineer to get that top job. If asked (and she hopes the next generation of women WON’T be asked), she’ll tell you she believes she got the job because she was the best candidate and not because she’s a woman. It’s a tricky question for Hutt, because she also supports affirmative action targets as a route to develop more female business leaders.
“Targets are very different from quotas. They are aspirational and they drive action,” Hutt points out. “This isn’t about false promotions. It’s about making sure the right people do the right work, and, as an added layer of consideration, we should be thinking about gender.”
Fortunately for Hutt, she joins an impressive cadre of women leaders within Emera’s companies who have already shattered the so-called ‘glass ceiling’.
The change didn’t happen overnight. Nancy Tower is Emera’s chief corporate development officer. Before that, she spent three years as COO of Emera Newfoundland & Labrador overseeing the Maritime Link project that will eventually bring hydro from Labrador to Nova Scotia.
The former chartered accountant recalls that when she started as comptroller 20 years ago, there was only one woman on the executive team. “The company looks different today,” Tower says. “There are a lot more women in senior roles and more importantly, in operational roles, actually running large companies.” She cites Sarah MacDonald as an example; the Dalhousie University MBA grad is now in charge of Teco Services in Florida as well as president of Emera Caribbean.
Tower says Emera president Chris Huskilson deserves credit for promoting women to leadership positions over the 12 years he’s been at the helm. “My personal experience was that after several years in finance with Nova Scotia Power, he said ‘You should get some operations experience’,” Tower recalls. “‘Go to Tufts Cove and learn about the power generation business.’ No non-engineer nor woman had ever done that before.”
When Tower returned, Huskilson made her vice president of Customer Operations — a learning curve that included the wires, the trucks, and the call centre. Tower says those opportunities gave her the foundation to become a senior company executive.
Judy Steele, whose finance and public relations degrees prepared her to manage Investor Relations, says, “I think Emera has the gender balance it does today because people have had a chance to spread their wings — to try a job outside their skill set. It gives people a broader perspective on the business which is helpful if you want to be promoted.”
Emera CEO Chris Huskilson acknowledges there is an element of risk in parachuting executives (whether male or female) into unfamiliar territory. But with risk also comes rewards, he says, noting that momentum around diversity builds as people get the experiences they need to become leaders and role models for others.
“Traditionally in the work world, there’ve been jobs that men do and jobs that women do, and we have tried not to think about that. It’s a generic approach to growing our people and our business. The result is that lots and lots of women are doing things the outside world wouldn’t think they could, and sometimes even they didn’t think they would, do.”
Rachelle Gagnon is the vice president of administration and client services at Assumption Life, a mutual insurance company with 250 employees headquartered in Moncton. The firm sells insurance, pensions and mortgages, and its subsidiary Louisbourg Investments offers wealth management advice. Although she’s the only female VP, 28 per cent of the senior management team and one-third of the board of directors are women.
“I think it’s important for the board to be a role model for the workforce it represents,” says Gagnon. “We’ve been striving toward gender parity for several years. The Government of New Brunswick has said it wants 50 per cent of the people appointed to boards or provincial agencies to be women, so I think there’s a recognition that diversity can bring value to organizations.”
Assumption Life has a 60:40 ratio of female to male employees, all of whom are fluently bilingual. Gagnon says the company conducts salary analyses to ensure pay scales are gender neutral and checks regularly to see if it is receiving a similar number of male and female job applicants.
Gagnon took advantage of the company’s management development program (which provided flexible scheduling and financing) so she could complete an executive MBA while working. One of the program’s goals is to develop more female leaders. Gagnon says Assumption Life doesn’t use gender diversity targets and predicts they would fail because the company’s low turnover rate (less than three per cent a year) leads to few openings.
“Our main challenge is to ensure that when a management position opens, you have people ready,” says Gagnon. “Timing can be a particular challenge for women. I went back to university part-time to take an MBA. It took me six years to do that! It meant I was studying nights and weekends, and I have two children. Sometimes you do need to make some personal sacrifices to get ready for the next level and we’re seeing more of that with men who are increasingly involved in the lives of their family.”
Catalyst Canada, a non-profit group that works to develop more female leaders, has issued a Call to Action challenging companies to set a target of at least 25 per cent female directors by 2017. Shortly after the report’s release last June, the Ontario government committed to women making up 40 per cent of appointments to provincial boards by 2019. Ontario also encouraged businesses to set and meet a target of 30 per cent women on their boards within the next five years.
In Newfoundland and Labrador, crown corporation Nalcor Energy is close to achieving gender parity on its board (two of five are women). While none of its eight executive officers are women, its board recently approved a target of 30 per cent women for its executive team and 35 per cent for women in management positions. The energy company is also undertaking a “self-identification census” of its workforce to assess its baseline representation of various groups (women, Aboriginal, persons with disabilities, visible minorities). This, the company says, is a first step toward creating diversity and inclusion strategies and initiatives that better reflect the gender and the First Nations population.
Studies show Canadian companies aren’t keeping pace with their competition in Norway, France and the UK, where a mix of legislated quotas and voluntary targets have increased participation by women on boards to between 25 and 35 per cent. Two years ago, the Ontario Securities Commission (OSC) made new rules requiring all publicly-traded companies on the TSX to report the percentage of women on their executive and board of directors. Companies must also disclose targets or objectives for improving diversity, and those that don’t comply (a whopping 90 per cent reject them), must explain why they don’t.
Emera had a head start because of provincial legislation passed in the 1990s that privatized Nova Scotia Power. The law specified that women make up “no less than 25 per cent” of corporate directors on the board.
“There’s no doubt talent is equally distributed in our population, and more than 50 per cent of university graduates are women,” says Emera chair Jackie Sheppard. She’s a native of St. John’s, a Rhodes scholar, a corporate lawyer, a retired senior executive with Talisman Energy, and founder of Black Swan Energy. The avid runner and art history buff serves on the boards of several energy companies and strongly supports the OSC rule changes.
Reached by telephone at her home in Calgary, Sheppard said, “It’s the management of talent through an organization which is critical to ensure people are available in the future to take board positions. The Ontario Securities Commission rules are founded on studies that show diversity appears to be an enhancer in the boardroom.”
Catalyst Canada tracked the performance of Fortune/Financial Post 500 companies between 2004 and 2008 in the U.S. and Canada. “The Bottom Line: Corporate
Performance and Women’s Representation on Boards” (2011) reported companies with the most female directors outperformed those with the fewest. Those companies yielded a 26 per cent higher return on invested capital and a 16 per cent higher return on sales.
Killam Properties also thinks diversity is good for business. Established 16 years ago in Halifax, the publicly-traded company (converted to a REIT last year) owns 14,000 apartment units and 35 manufactured home communities. Killam has hired women to fill five of its nine executive positions, or 55 per cent of its top jobs.
“Our business is about houses. It’s about home, and a lot of the time that decision gets made by the woman,” says Robert Richardson, Killam’s executive vice-president and CFO. “Having strong female representation on our executive made perfect sense. We’ve grown and it’s because they know what they are doing.”
Killam’s percentage of female senior executives is among the highest in the country, but it was only in 2014 it recruited its first woman to the board, BMO capital markets analyst Karine MacIndoe.
The real estate company has committed to adding another woman in 2017 to move to 20 per cent. Richardson says the long-term goal is gender parity but says it’s always hard to find the right person for the job “at a specific moment in time” and limiting the pool to 50 per cent of the population means it will take even enthusiastic companies years to execute.
“Right now we could use someone on the board with a legal or human resources background,” says Richardson. “If an exceptional male was there to fill one of our requirements, we would have to look at him. In a perfect world, we would find an exceptional female and take her. But that’s not always the case, which is why having a target is a good idea. You need to have flexibility, but over time you should be able to achieve gender equality.”
Larger firms such as Sobeys Inc. have gone outside to boost the number of women on its board and senior executive. The Stellarton, Nova Scotia-based grocery chain has partnered with the Canadian Diversity Council to train its human resources managers to recognize unconscious biases and find more people to short-list from under-represented gender, racial and disabled groups.
During its last two hires of senior executives, Sobeys instructed the recruiters to give preference to female candidates where all qualifications were equal, according to Andrew Walker, Sobeys vice president of Communications. With the hires of Beth Newlands Campbell as president of Sobeys Atlantic/Ontario and Lyne Castonguay as chief of Merchandising, women now account for 26 per cent of the executive team and 20 per cent of the board of directors.
Meanwhile, there are large, well-known companies in Atlantic Canada (e.g. Newfoundland Capital Corporation and Clarke Transport) that have yet to name a single woman to their board of directors. In New Brunswick, the privately-owned global McCain Foods empire includes just one woman on its 10-person board and not a single woman on its senior executive team.
The number one reason offered by companies for refusing to appoint women to their boards, according to a follow-up report on diversity for the OSC, was “not wanting to compromise principles of meritocracy.” It’s a notion Gail Cook-Bennett flatly rejects. When the economist and former chair of Manulife Financial served on Emera’s board 10 years ago, she championed the appointment of a fourth female director. Part of Emera folklore is how, when asked at a meeting if the company would have any difficulty finding a suitable candidate, Cook-Bennett retorted, “Absolutely not! All you need to do is LOOK.”