Every year, Osler analyzes and reviews the disclosure filings of TSX-listed companies and produces a detailed report on their diversity efforts. The 2018 Report provides evidence that the gender gap persists and that change has been slow to arrive – despite mandated disclosure under securities laws, increased support among institutional shareholders and many other incentives to increase the representation of women. Knowing many of our lawyers and alumni are engaged in board work of various kinds – or would like to become involved in serving on a board – we thought it would be valuable to our readers to interview some of our women leaders and advisors to elicit their views on best practices (and lessons learned) in making the leap from legal advisor to board contributor.
Our thanks for their time and voluble responses to our questions to:
Joyce Bernasek, Partner, Financial Services, Osler
Monique Jérôme-Forget C.M., O.Q., PhD., Special Advisor, Osler
Jean Fraser, Retired Partner, Osler
Dale Ponder, National Co-Chair, Osler
Linda Robinson, Retired Partner, Osler
Briefly describe your board work and any particular role(s) you played.
Monique Jérôme Forget
I currently serve on the board of the Bank of Canada. The BOC board provides general oversight of the management and administration of the Bank. That work encompasses strategic planning, financial and accounting duties, risk management and HR. It is a most stimulating board and I have chaired the human resources and compensation committees. Earlier on, I served on the Canada Life board when it went through the complex demutualization process and that was fascinating. I have served on not-for-profit boards that span community, cultural, medical and educational organizations, including the OECD, the Montréal Symphony Orchestra, and the McCord Museum, which I still chair.
I currently serve on several boards – each relates to companies in very different industries. I chair the compensation committee for two, chair the risk committee for one, serve on the governance committee of two and the audit committee of two. The work is episodic, either because it relates to the normal quarterly rhythms of the board or because it is responding to special circumstances which arise – typically proposed transactions or strategic initiatives. In the past year, I have chaired two special committees established to oversee proposed related party transactions. Overall, I find the work of a director challenging and interesting. You are involved in supervising the business at a high level – the strategy, the risk assessment, the long-term planning.
It is a much different role and perspective than that of counsel advising a client. Looking at a comp committee as an example – it is responsible for the structure of the compensation plans of the organization and makes recommendations to the board as to the compensation of the CEO and other NEOs. But more importantly, the committee oversees for the board and makes recommendations regarding succession planning at the executive level. Leadership and leadership succession are critical to the success of an organization and very important responsibilities of the board.
Until recently, I was a director of Infrastructure Ontario; I’ve been on the board since 2006 and served as chair for the last four years. IO is the Ontario government agency set up as an independent agency to interact with the private sector; it’s best known for being responsible for managing the building of large public infrastructure projects, such as hospitals, prisons, courthouses, and transit and transportation.
I joined the Women in Capital Markets board in 2018 and serve on the governance committee. WCM is committed to advancing women in the finance industry in Canada and increasing the number of women in senior leadership roles. Its mission is to accelerate gender diversity across the finance industry through building out a talent pipeline, advocating for change and transforming workplaces across the country.
I serve on a variety of public company boards and I also am the Chair the Canadian Business Growth Fund, a private fund sponsored by Canada’s large financial institutions with the goal of helping to close the funding gap for Canadian mid cap businesses seeking growth. I also sit on a hospital board and various advisory boards. I am the governance committee chair on one of the public company boards, served as chair of the governance committee on another board and also have served or currently serve on various other public company committees, such as investment committees, audit committees, and human resources and compensation committees. I am also on the quality committee of a leading hospital.
Why did this board appeal to you?
Monique Jérôme Forget
The BOC board appeals to me because of the quality of its research, the substance of what the board needs to consider as part of its mandate, and the quality of presentations that come to the board’s attention. It also considers international issues related to the G7 and G20 which makes it among the most interesting boards I have participated in. And it is a relatively small board (12 independent directors) which also appeals to me.
The board positions I accepted were all in industries that I knew very little about but were of interest. They also appealed because I either knew them or knew of them and was confident that the board and the company operated to a high standard. As a director, you must be able to trust your fellow directors and senior management. I also thought that my experience as a corporate lawyer in M&A, finance and governance would translate well in each case. While my past experience as counsel helps in understanding the substance of board discussions, it has turned out that the most important part of my past experiences is my having been managing partner – essentially the senior executive of the firm’s business. Advancing the commitment to diversity has also been satisfying – the increase in the representation of women on the board or at the executive level in two of the companies where I am a director has been particularly gratifying.
I have always had an interest in urban planning. I have a Masters in Urban and Regional planning; I have never really used that degree and it reflects one of my interests that has never really been satisfied. At the time I was asked to join the IO board, I was troubled by what I saw as crumbling infrastructure in the city and province, combined with little apparent will to tackle what seemed to be an enormous deficit. While the position of director comes with a modest retainer and meeting fee, the job is really a public service and I was interested in contributing in some way in a public service capacity as I neared the end of my legal career. This seemed like a good start.
The board’s mission – to increase diversity and amplify the importance of recruiting women in all segments of the capital markets industry – resonated with me. And given the diversity issues attracting global attention, the timing couldn’t have been better for me to contribute to this important endeavour. WCM President and CEO Camilla Sutton did an interview in The Globe and Mail last year in which she commented that it was time to stop talking and get things done. I wanted to be part of this next phase which involves engaging men and women in improving gender diversity and inclusion across the FS industry in Canada. I believe the momentum for doing that is now.
I made the decision some years ago in my role as Managing Partner of the Firm that I wanted to join a public company board, because I was confident that it would make me a better Managing Partner for the benefit of our firm. Largely because the experience would allow me to bring back to the firm best business practices and insights into the most significant business issues that mattered. That proved to be absolutely true and I pursued various initiatives for the firm as a result of what I learned. And of course, I had also seen first hand the value that Brian Levitt was able to provide to the Firm when he was Co-Chair, in part because of his outside business experience and his connectivity to the Canadian business world. Private practice lawyers are not trained to be business leaders or even business decision makers. The main role of a private practice lawyer is that of advisor and in business it’s an entirely different skill set that is required. So, in hindsight, I can say that I was seeking exposure to a variety of business leaders to gain experience from the best of them in making decisions about their business. And this was my primary motivation in searching for my first board appointment. Now, as Co-Chair of Osler, I have extended my board work into areas that are of interest to me, but as importantly, in industries that I believe will allow me to contribute at the boardroom table in a meaningful way given my past experiences in business and law. My rules for joining a board are threefold: one, you must trust and respect the company’s management; two, you believe the learning curve will be short enough that you can contribute meaningfully to the boardroom in reasonably short order; and three, it’s an enterprise that’s not likely to get into serious reputational trouble.
Why were you recruited to join this/these boards?
Monique Jérôme Forget
The former Minister of Finance, Jim Flaherty, asked me to join the board. Today, to serve on any government sponsored board, you need to apply. Certainly, my previous roles as Quebec’s Minister of Finance for more than a decade and becoming President of the Treasury Board helped. But I also know being a woman and a Francophone were considerations for key board positions. That representation was and is important, but I also know many of those boards who recruited me got more than they expected! I also think the diversity of boards is critical to success – you do not want to serve on boards that are identical in makeup.
The person principally responsible for the creation of IO had been an associate at Osler. I had worked closely with him on a number of files and we had kept in touch. He was aware of my interest and background and approached me with the newly appointed chair of the board to gauge my interest in joining this new organization. It was a public sector start-up with all the inevitable start-up issues that needed some expertise. For instance, governance was an important issue and something that they needed to get right at the outset.
They were recruiting for several positions and had a matrix of skills of existing board members so they knew where they had some gaps. My practice over the past decade has been entirely focused on finance and I think my enthusiasm, passion, commitment and my strong legal skills made me a suitable fit. They wanted to add to their governance committee and that, too, is an area of expertise that I could bring to bear.
I think my role as full-time Managing Partner/Chief Executive at Osler distinguished me from the role of private practice lawyer and definitely had given me a broad base of management experience that provided me with expertise beyond my practice area of M&A. This was understood by the boards I am currently serving on; they were able to see past the M&A lawyer title. I’d also say that my experience for about 10 years with the St. Michael’s Hospital Board was a tremendous learning experience. That board was filled with CEOs of banks and other major public companies and I learned tremendously from all of them over that decade on the board. In my experience, it is not easy to serve on a public company board without having had prior operational experience in running a business or a business unit.
What were the biggest surprises (positive and/or negative) you experienced when joining a board?
Monique Jérôme Forget
I have found some of the bigger boards can be less interesting than you might think. To make your presence felt on one of those boards, it helps to have the ear of the chair or the CEO. When I was on another public board many years ago, I was one of two women. Recruiting new board members at that time, it was made clear to me that having two women was enough and that they would not seek out a third. That experience reinforced for me the need to have quotas!
Positive: the level of engagement of my fellow directors; the openness to collaborate on solving problems; the respect and openness of senior management; the intelligence and strategic thinking brought to the table.
The organization was very new and very few of the directors had any board experience. However, once we engaged a recognized search firm and adopted a more rigorous approach, we became a highly functioning board. On the positive side, the board members, with very few exceptions, were passionate about the organization, hard-working and intent on making it the best organization they could. It was surprising the depth of talent and experienced people who wanted to serve and were grateful for the opportunity to serve. The same can be said of the senior executive team – most of whom were and are working for a great deal less than they would command in the private sector and working as hard or harder.
I think there is a perception that working on a not-for-profit board is light in terms of time commitment. Quite the opposite. I am serving on a hard-working board and it takes a sizeable commitment each month. I have also come to realize that there is much institutional knowledge that as a new board member you need to absorb in order to be effective and that too takes time. I am spending additional time talking with board members to make myself more aware of the issues and opportunities ahead.
Well, I was an advisor for many years to big companies undertaking transformative transactions, and as a result, I have been around boardroom tables for a long time and watched the decision-making process and boardroom dynamics very closely. It was probably the most interesting part of my M&A and governance practice. So truly, there haven’t been many surprises in the boardroom so far. But business is dynamic and having to live in the world of transparency of a public company with quarterly financial reporting and timely disclosure requirements is a much different reality from those of us navigating in a private business context.
What lessons did you learn that would help our lawyers and alumni who may be considering joining a board and what advice do you have for making the transition as effortless as possible?
Monique Jérôme Forget
I think younger lawyers should get involved in boards of not-for-profit organizations. There are so many organizations that could benefit from a lawyer on their board and you will learn a lot – especially how to work effectively with other board members. You can learn about working on various committees and learn how to chair one. I am always looking for lawyers to serve on a board as they can bring their legal skills to bear and can play a vital role. A good candidate is an active listener, is precise in making points, and is clear and practical. Boards are built on knowledge and judgment. Being able to counsel the CEO on a matter that prevents him/her from making a serious mistake is where your ability to use your judgment can matter most. All boards today need to have members who can provide substantive knowledge and bring it to the table and are not quiescent to the chair.
I also think that, after a period of time, you need to move on to other board experiences. Otherwise you risk getting too familiar and comfortable. Boards need renewal and board members do too.
Spend the time with senior management that is required in the on-boarding process to understand as quickly as possible the business, its challenges and opportunities; get to know the senior leadership team and what worries them about the business; repeat this self-education from time to time, perhaps with focus on a particular business unit. In the first year, listen mostly – joining a board is like arriving in the middle of a conversation; it takes a while to get up to speed and for recent history to become less relevant. Understand where you can make a contribution and where others around the table are better suited.
Having seen about 40 or so directors on various boards, the best directors are: (a) those who understand that a director is not an executive of the company – for some this is a hard lesson, particularly for those who have been in a management role and have views on how management should be running the business; (b) those who don’t need to inject themselves into every discussion and talk only when they have something to contribute.
I have been involved in interviewing and recruiting directors as chair of the search committee for IO and chair of the nominations committee for a public board I sit on. I think the best preparation for a board interview is for a candidate to think about how she/he can best contribute to the board – both what the board can do for them and what they can do for the board and the organization. Due diligence on the organization and preparation for the interview and, if selected, the board are critical. The organization will inevitably have an on-boarding process, but the more you can learn about the organization, the industry, the environment in which it operates, its competitors and the shareholders, the less lost you will be for the first few meetings – particularly if it is unfamiliar territory. Those who do not do their homework are a real burden for the rest of the board as time is taken from normally full agendas to educate the members, just so they are in a position to take a view.
I think it is important to do your research about the board and what role is envisioned for you before you undertake that commitment. Once you commit, I think you need to listen more than talk as you need to get up to speed. I echo Purdy Crawford and others at Osler who have advised that beginning board work by joining a community or other not-for-profit enterprise can be a terrific platform for understanding how to work in collaboration with others. I would also only do work that resonates with you personally. I have declined other opportunities as I know how much capacity I have to contribute to the board, manage my practice and be an effective parent. You need to make conscious choices of how to best spend your time.
For a lawyer looking to join a public company board eventually, I think it’s important to gain some early not-for-profit or perhaps quasi-governmental board experience. For that experience to resonate with public company boards, however, it has to be a quality, best practices institution. To be engaged in smaller or more local community enterprises makes sense from a business development or networking perspective generally, or just for the great reason of personal satisfaction, and that is an entirely different, and laudable, experience to engage in, but it is unlikely to provide the experience one needs for a business board. And as I mentioned earlier, gaining business operational experience and operational responsibility of some kind is really what most public company boards are searching for in order to satisfy their skills matrix for board composition. I’d encourage people to look at the proxy circulars for public companies to review their description of their skills matrix and how their board members’ qualifications satisfy the requirements that they’ve identified for their board. I believe that would be very instructive.
This discussion clearly shows that serving on a board is a valuable experience. It provides the opportunity to grow professionally and personally, as well as to engage in stimulating work while getting the chance to make a difference. The key takeaways for lawyers who are interested in joining a board include:
- Do your homework: Learn everything you can about the organization before committing to join the board so you know what you’re getting into. Then continue the learning process once you’re a board member – especially during your first year. It’s critical to listen attentively so you can understand the opportunities and challenges the organization is dealing with.
- Choose a business or industry that interests you: Joining a board is a great way to learn new things and to explore interests that you may not have the chance to follow in your daily work.
- Prepare to collaborate: Being on a board provides valuable insight into the importance of collaboration and will help you hone those abilities.
- Leverage your legal skills: Lawyers have much to offer boards – from substantive practice area knowledge, to familiarity with governance issues, to management experience, to good judgment. Having those skills will make you a welcome addition to the board you’re interested in joining.
We hope this panel discussion provided some useful insight and encourage everyone who’s been thinking of joining a board to make it a priority today.