ATB x DirectHer on the power of gender diverse boards
By ATB Financial 8 November 2021 4 min read
Why is it important for women to be active on boards?
It’s important that our organizations and boardrooms reflect the communities we live in and the values we hold. Creating opportunities for equality and representation at the decision-making level is a critical component to ensure diversity of thought. The challenge has been that an overwhelming amount of women self-select out of leadership opportunities, often because they feel they don’t 100 percent satisfy the board application criteria.
Whether diverse candidates face structural hurdles to entry, confidence gaps or other barriers, we lose out when deeply competent individuals aren't contributing their expertise and perspectives. Diverse boards represent a broader spectrum of experience and result in better decisions being made.
If the goal of a board is to reflect a broad collection of experiences, perspectives, backgrounds and viewpoints to support better decision making, then the composition of the board will define its effectiveness.
“Collective intelligence is the idea that you can have a lot of smart people in a group, but that doesn't inherently make a smart group," Chantel Cabaj, President and founder of DirectHer, explained.
One study on collective intelligence found that in small groups, a 43 percent variance in group performance was predicted by four factors: perceptiveness, number of women, moderate level of diversity, and fair distribution of speaking turns. This means that groups make better decisions when women and minorities are not only included, but given the opportunity to meaningfully participate in the decision-making process.
Why organizations should prioritize board diversity
The Asch conformity experiments—originally conducted in the 1950s to measure the effects of group pressure on judgment—show that in small groups there is an influence "tipping point".
Influence on an individual becomes meaningful when three or more people in a group support a particular idea. In other words, to effectively challenge assumptions or the status-quo thinking of a group, there needs to be significant, intersectional diversity to prevent homogenous cliques from asserting outsized influence. It’s not enough for one or two directors on a board to challenge the assumptions of the majority.
ATB’s current Board of Directors includes seven men and seven women. This intentionally balanced committee includes a wide range of backgrounds and experiences, lending diverse perspectives to the decision making process.
Board roles & governing models
There’s no universal definition of the term ‘director’. As a director, your role, responsibilities and level of personal liability will change based on whether your organization is incorporated, whether it’s for-profit or not-for-profit, and your board’s governance model. There’s a distinction between a board that’s focused on daily operations and a board that is focused on developing high-level strategy and oversight systems.
While there are common board governance models for nonprofit and for-profit organizations, these models are often adapted to meet the specific needs of an organization and the composition of the board.
One unchanging, defining aspect of your role as a director is fiduciary duty—the duty to act in the best interest of an organization as it’s legally defined, not in the best interest of yourself as an individual.
Board lingo and best practices
Understanding the terminology and rules that define the organization and how it’s governed is important to finding success on a board. If you’re interested in joining a board, you’ll want to familiarize yourself with:
- the legislative documents that relate to the legal definition of your organization. These might include the AB Societies Act, the AB Companies Act (Part 9), and the Canada Not-for-Profit Corporations Act.
- your organization’s constating documents—its articles of incorporation and bylaws
- your organization’s policies, resolutions, and governance framework
While every board runs meetings differently, most boards use a variation of Robert’s Rules of Order to create procedures for introducing topics of discussion and making decisions.
One of the more challenging aspects of a board position is being tasked with making decisions using imperfect information. Your fiduciary duty as a director involves understanding and monitoring your organization’s financial situation as it changes over time to make the best decisions and recommendations possible. Expanding your network, investing in learning opportunities and partnering wisely can contribute to your success.
“ATB is committed to creating access to capital to facilitate growth and innovation,” says Nikki Briggs, Head of Women in Business at ATB, “But— just as importantly—we’re dedicated to building an ecosystem of education, access to social capital and deep industry expertise that women in Alberta deserve.”
Taking your place at the (boardroom) table
If you’re interested in securing a position on a paid board of directors, you can also consider getting certified by the Institute of Corporate Directors (ICD). The certification can advance your skill set, connect you with other Canadian directors and demonstrate your commitment to the role.
Regardless of whether your goal is to serve on a paid corporate board or a non-for-profit board you feel passionate about, Manjit Minhas offered words of encouragement:
“Don't wait for someone to tap you on the shoulder. Put your name forward for something you're interested in."
Want to learn more from other successful women? Check out more stories about women in business in our Good Advice section!
This article was adapted from an event in October 2021. ATB and the Canadian Heavy Oil Association (CHOA) co-hosted an online workshop with DirectHer, an Alberta-based not-for-profit that empowers women with the knowledge and confidence to become board directors.
Attendees from across the gender spectrum learned about the fundamental principles of governance, power of board diversity and basics of board structure. They heard directly from Alberta women powerhouse leaders and board members Manjit Minhas, Sue MacKenzie, and Louisa DeCarlo. With moderation from Chantel Cabaj, DirectHer, and Nikki Briggs, ATB, participants learned how they can offer their unique expertise to a corporate or not-for-profit board—and make an impact once they’re there.
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