This past summer, I covered the 7th G(irls)20 Summit. As the Official Global Correspondent I learnt about the G20 and how it operates. I worked with high potential young women from around the world to develop and formulate a detailed communiqué, which was presented to G20 Leaders before they met in China.
Canadian companies have the potential to become more competitive if their boards are comprised of directors who are the most qualified in a greatly-expanded pool of potential directors. But to do this, we need increase the pace of change to achieve board diversity and gender parity.
When making predictions about economic success, it is impossible to know what the future holds. Yet the corporate investment in women certainly isn't a hedge. Beyond simply a moral obligation towards equal opportunity, there is fiscal value in utilizing a previously undervalued resource.
When a regulator advises a board of corporate directors that progress on gender diversity is "simply not good enough," that is code that the status quo will not continue and that more regulation may result. And the second wave of regulation is often worse than the first.
I teach my students and counsel board clients that shareholders elect directors; directors appoint managers; directors are accountable to shareholders; and managers are accountable to directors. This is largely theoretical.
Not only is the millennial generation changing the meaning of corporate, they are also changing how corporations are run. Increasingly, corporations are changing their mission statements to better reflect the "triple bottom line," which emphasize their corporate social responsibility initiatives as a means to better appeal to the next generation of employees.
Strikes, picket lines and other forms of protest that require significant labour resources are ineffective against corporations that can use automation or outsourcing as significant bargaining chips. If this is the case, how are activists meant to effect real change? One way is in the corporate boardroom.
The Ontario Securities Commission (OSC) should be congratulated for addressing gender diversity last week. Other than Quebec, the addressing of boardroom and senior management diversity (beyond gender) has been long overdue in Canada.
Boards should revitalize, as the American economy (and the world) is dependent on it. But they need to do so in a way that puts their own interests and reputations at risk. They need to be ruthless in recreating - and think only of the best interests of their enterprises. They need to "person proof" in other words, which is the theme of the NACD conference.
There is merit to Peter Munk's position. If shareholders truly believe in pay for performance, then it is equally important to attract and motivate executive talent in a downturn as it is in an upturn. This means, paradoxically, that a compensation committee will pay out more, in spite of low stock price, and rein in executive pay during an upturn.