Published December 18, 2017
My business partner and good friend Steve Indig and I have been dreaming big these days. Fresh off a 25th anniversary which helped us launch a new website, welcome a new associate, and host a gathering in Ottawa to thank our National clients for their trust and business, we met recently to discuss the next big thing. Governance is a hot topic right now and given how long we’ve been talking about and providing services in this area, we were both left with a sense of urgency to become more vocal about accelerating the pace of change.
So you can imagine my interest when I read an article in the Financial Post about the slow-to-glacial pace of growth for the number of women and other diverse groups sitting on the Boards of Fortune 500 companies. While at first glance one might be tempted to feel progress has been achieved since the Canadian Board Diversity Council has shown that women represent 22.6% of directors of boards, up from 10.9 % in 2001, the most recent figure reflects just a single percentage point increase from 2016. It appears the glass ceiling has been reached.
Last year, I penned a blog on the same topic, calling for sport leaders to become more intentional when considering their approach to ensure a diverse Board. Rather than calling for quotas, the prevailing sentiment around the “comply or explain” tactic was that it ought to be incentive enough to inspire leaders to do the smart and right thing by actively searching for diverse peoples to complement their existing board composition. By diversity, we at the Sport Law & Strategy Group include gender, skill set, expertise, sexual orientation, age, and ethnic background. It would be interesting to review how many sport organizations have intentionally set aspirational targets to ensure that at least the minimum 33% objective is achieved (note that 33% is considered to be the minimum number required to affect positive change). Sherri Stevens, CEO of the Canadian Board Diversity Council, says the question of whether or not quotas are needed to get more gender parity and increase other forms of diversity on corporate Boards has not yet been answered. For instance, she is calling on Boards to consider at least three diverse candidates for every open Board seat to “demonstrate quotas are not needed in Canada”. I’m not so sure about the patient approach given the slow pace of change. Quotas seem to work well in our sector as they have helped us achieve measurable progress as we look to own the podium. What might it look like if we were to set progressive, realistic and time-bound targets to reflect our shared principles of what constitutes great governance? It might look something like this:
- Ensure that your Board reflects the composition of your membership. At a recent Canadian Olympic Committee meeting held in November of this year, one of the panelists referred to a ‘wicked problem’ that continues to suffocate international sport – with most of the International Federations being led by “pale, stale, males”. Is it not time to move beyond navel-gazing to ensure that the stewards of our sport reflect the principle of diversity? Just as Canada has been known for its leadership in the fight against doping, might it now head the call for leading the way on standards of good governance? I believe the world can learn from the progress we’ve made in Canada … and there are still miles to go before we sleep, to borrow a phrase from Robert Frost.
- Ensure the composition of your nominations committee reflects the principles of diversity that you are trying to embed within your Board. Provide clear terms of reference, a Principles of Good Governance (which includes a statement on how the organization embraces diversity) and a skills matrix that the committee members can take into account when inviting candidates to serve as fiduciaries. For an example on how to create Principles of Good Governance, please send me an email.
- Create a Directors’ College for Sport – requiring that interested candidates be informed, educated and trained so they can fully understand their role as fiduciaries of the organization. It does not have to be as complicated, expensive or time consuming as some of the current certificate programs but we ought to give careful consideration to how we might better populate our Boards with individuals who have the knowledge, interest, capacity and skill-set to lead a 21st century sport organization.
- Get the topic of diversity on your Board agenda. Speak to the risks associated with not doing so.
- Work with Sport Canada and other funding agencies to require standards of good governance that also include diversity minimums. #becauseits2015 … need we say more?
- Ensure that your Board has a process to orient new directors so that they fully understand the by-laws and also the ways in which decisions are made. Adopting a Management by Values approach can help stewards of the organization ensure that all decisions are consistent with the organization’s values … a sound risk management tactic.
- You may also consider setting aside a yearly Board education session to invigorate their thinking and to challenge current assumptions. Great governance is a journey and not a destination, requiring ongoing education to ensure the organization is benefiting from the careful stewardship that underpins this important role. Gymnastics Canada is a good example of having embedded this practice, bringing together their Board once a year for a learning workshop on various topics.
- Ensure you have mandatory term limits in place. This creates an opportunity for ‘fresh blood’ to join the Board and provides an incentive for Directors to serve with purpose, considering the legacy they want to leave with the organization over a defined period of time. These dedicated volunteers need not leave the organization but rather can be re-invigorated with a fresh title, looking for new ways to contribute.
The wicked problem that is great governance presents an ongoing challenge to both staff and volunteers. We in sport need to take this bull by the horns so that we mitigate the risk of conflict, closed networks, nepotism, good people leaving, and mediocre performance. If “good truly is the enemy of great” as management guru Jim Collins likes to say, then let us all be inspired to move the needle, however long it takes, towards great governance.