A conversation with Catherine Roome

Joanna Cameron: I’m Joanna Cameron, a partner in Osler’s Corporate group and co-author of the annual Diversity Disclosure Practices report. I’m pleased to welcome Catherine Roome. Catherine is a tech innovator with a passion for serving the public interest. She’s a director of BC Hydro; chairs the board of its energy trading subsidiary, Powerex; and is a member of the Site C Hydroelectric Project oversight board. She also serves on the private sector boards of Prospera Credit Union and McElhanney Engineering, where she chairs her operating board. Catherine recently served as interim CEO of Atira Women’s Resource Society, supporting governance and operational renewal for B.C.’s largest supportive housing organization. Previously, she led Technical Safety BC for a decade. Catherine is dedicated to fostering justice, equity, diversity and inclusion and encouraging the next generation of leaders. Catherine, thank you very much for joining me here today.

Catherine Roome: It’s a pleasure.

Joanna Cameron: This podcast is actually even more timely, as we just released our tenth annual report on diversity disclosure practices in Canadian public companies. And one of our findings in that report jumped out to me in particular, given your background and especially the fact that I believe, at present, four of the boards of which you are a member are chaired by women. And interestingly, our research in preparing that report suggests that there is a positive correlation between board diversity and women occupying the chair role and/or the CEO role. Now, is that consistent with your experience?

Catherine Roome: Well, it is interesting that there is that correlation, and I think it makes sense because of the boards where a woman is in the current board role chair, all of those folks came from C-suite leadership positions. So, Gina is a CFO and now a founder and entrepreneur. Lori, another board chair, is deputy minister, now retired, and I’m a former CEO. So maybe the correlation is we get the big job. We understand how tough it is to be the CEO of an organization. But we also know that women are incredibly competent leaders in that role. And so when you have a woman who’s a board chair, who’s gone through all that experience and then ended up being on the board, there’s an opening there for understanding that styles of leadership and their diversity and all that that means is available to the board in their next choice for turnover of the CEO. And we know that doesn’t happen very often. It’s anywhere from four to 15 years. And when there is a change, and recently on a private sector board, we were searching for CEO after a person said that he was retiring, the leadership advisory firm said, “Well, let’s widen the aperture. We’re going to look at across the board all of these different diversity attributes.” And I think in part, the receptivity of having a woman board chair to that, pulling the search into all of the corners of the room in terms of the applicants’ skills, we were open to it, and they knew that we would be. So kind of a confluence, I think, of opportunity makes itself available, but then also just the realization that that experience exists out there. Maybe that’s the perfect storm analogy for why board chairs, as women, are very supportive of women CEOs and create the culture to make that an opportunity.

Joanna Cameron: What is the biggest change you’ve noticed in the board dynamic as a result of increased diversity on the board?

Catherine Roome: So we had this tense conversation last week on a financial institution board. And it’s tough. And what is interesting to me is it was the women directors who were really challenging whether we had heard everything we needed to from the leadership team, whether it was a bit of an optimism bias or whether they’re wanting to control the information and drip it to the board because they themselves are going through something they’ve never experienced before. And it resulted in some tension between certain directors, which I think is great because it means people are getting uncomfortable enough to have the candor in the conversations and talk about the real stuff. And that happened. The rest of the meeting went on. There was an in-camera at the end, and people again said, “Well, that was really uncomfortable.” It took another woman director to say, “And what is happening here is this is the very cultural attribute, the muscle that we have to change in order to make this successful, is that we’re willing to tell the truth and to challenge one another and to challenge management.” We haven’t had to pull on that muscle very much in the past, but it is this exact shift in our own behavior that’s going to get the deal done. And the fact that there was this discussion that went back to resolving the tension and the difficulty and everyone having a moment that was, “Oh, darn, that’s right,” I think that that’s the value of women on boards and a woman chair that allowed that conversation to happen and, in fact, encouraged the closure of it, and the emotional closure of it, because she values psychological safety. So we got even tighter as a team, as a board, because we were able to air these large differences in values. But we did it. It wasn’t under the carpet, it was done above the table. So yes, I think we do see differences when women are on boards in an extremely constructive way. And it’s a fact that any diversity at a board — whether that’s age or ethnicity or racialized identity, whatever it happens to be — it causes us to look at a problem through a different lens, and that can only be a good thing. So yeah, I’m excited. I’m excited by the shift that we’re seeing in decision making.

Joanna Cameron: I couldn’t agree with you more. I think that we talk about diversity being good for business, and we tend to fixate and maybe a function of what gets measured gets managed. And we try and correlate financial metrics with diverse characteristics of organizations, be it at the senior executive level or the board level. And I think to your point, the nub of it is that diverse boards and executive teams make better decisions, and that leads to better financial performance. I think it’s a tougher thing to quantify, but I think the real benefit is a step back from the numbers, and it’s what gets you to the numbers, and that really boards and teams of people, be it an executive management team as well, that can engage in that candor and that environment of creating what I would call constructive dissent, is what brings us away from the typical groupthink and the homogeneous decision making that has plagued corporate Canada, frankly, for years. And I agree with you, I think this is cause for optimism.

Catherine Roome: Yeah. So you and I were talking about that earlier. It’s that boards get really comfortable. They know each other, they are aligned to values, and in that comfort, they tend to make similar decisions because they look at the data in a similar way. And this open question about it may be clear to the largest pension funds in Canada that diverse boards make better decisions so they require that, why is that not the case in maybe smaller boards or family held businesses or private boards? And has the penny dropped? Or it’s just uncomfortable to change, but it’s going to be hard and I’m going to have to look beyond my network and use a leadership advisory term or a search firm to bring in people that I don’t know. And still, the culture fit is important, but I’m going to have to get uncomfortable to get stronger. And that growth mindset on boards is really what we need to be talking about. Our leadership development didn’t stop when we stop being C-suite executive. That continues as board directors, and you don’t grow unless you’re doing stuff that you’ve never done before — and whether that’s the activity of the organization, so a change in strategy, a change in CEO, M&A, but particularly a change in how you view a problem— that’s only going to be prompted by other people asking questions you hadn’t thought about.

Joanna Cameron: I agree, and you’ve highlighted one of the other takeaways from our report is the progress has been largely driven by larger, more mature and sophisticated issuers, and the numbers tend to be dragged down to some extent by the smaller issuers, and some sectors do lag behind the averages. There are certainly more levers. The pension funds, as you say, the institutional shareholder activist groups, they put more pressure on the larger issuers. But we are going to need these smaller issuers to see the benefit of it for itself. But hopefully that is where we’re going to break the logjam and then that’s what’s going to push through, it’s going to come from the bottom up now in terms of the size of the issuers. We’ll see next year.

Catherine Roome: Yeah. And let’s hope that your data that you can publish next year actually shows a tick up. I think the change, obviously, we had hoped it would come from target setting and that works in some cultures. It’s worked extremely well in Europe. I think what will work in North America more is the clients will demand it. It’s part of their quality management on who they select as contractors.

Joanna Cameron: I agree, the change is going to come from mindful and deliberate and forward-thinking purchasing decisions, in large part. But with that, I wanted to say thank you very much for joining me today on what was a very interesting discussion and lined up well with a lot of our findings. And I’m also optimistic — may have slowed down, but I don’t think we’re done.

Catherine Roome: Congratulations on the release of your report. It’s excellent.