Canadian Firms Scramble to Add Female Directors Ahead of New Rules

Every few weeks, Sue Riddell Rose gets a phone call asking if she’s interested in joining another corporate board.

An engineer by training, she’s chief executive officer of Perpetual Energy Inc., a corporate director and is well connected (her father, for starters, is Alberta oil patch billionaire Clay Riddell). She’s also, crucially, a woman at a time when the composition of Canadian boards are under scrutiny.

With about a month until new securities rules will require listed companies to disclose targets for leadership diversity, Canadian businesses are rushing to add female directors, especially in the resource sector. The fact that not many women have engineering experience doesn’t explain the dearth on energy boards, Riddell Rose says.

“There’s lots of people on the finance side that are female” who could be board members, Riddell Rose said in an interview in Toronto last week. “So I’m not sure why we’re not proportionately represented.”

Under the new rules, which come into effect at year-end in nine of 13 Canadian provinces and territories, companies will be required to disclose information including their policies on female representation on the board, consideration given to women when appointing senior executives and new directors, and targets for women on the board and in top positions.

‘More Proactive’

“Boards are being questioned on where are you going for candidates?” said Carol Banducci, the chief financial officer at Canadian gold producer Iamgold Corp. Already a director at Thompson Creek Metals Co., she also has been approached about joining other boards.

“Companies are wanting to be more proactive than reactive,” Banducci said yesterday by phone. “People are looking for individuals with a particular competency, in my case on the finance side. I’ve seen it on the legal side, I’ve seen it on the governance side as well.”

Canadian firms have been increasing efforts to find female board directors since the Ontario Securities Commission first proposed the new rules in January, according to Sherry Cooper, chief economic council at marketing firm MDC Partners Inc. and the former chief economist at Bank of Montreal.

“There’s certainly been a lot of activity for the last year,” Cooper said by phone from Toronto. “I’ve had to turn down potential board appointments.”

Ground to Cover

There’s still a lot of ground to cover. While the Canadian government has said it’s seeking to increase the representation of women on boards to 30 percent within five years, the current figure is 11 percent, based on available data for 235 companies in the Standard & Poor’s/TSX Composite Index, Canada’s benchmark equity index. That compares with 18 percent for the S&P 500, according to data compiled by Bloomberg.

Among the S&P/TSX group, 91 companies don’t have any female directors, and only five have a woman as CEO, the data show.