Can the mining industry diversify itself?
The mining industry is said to be one of the worst performers in matters of gender diversity. In fact, women represent only 16% of the workforce in the mining sector. How can we explain this when women represent the majority of all graduates in developed countries and when women make up almost 50% of the global workforce?
Some explain it by the hard and physical labour in the mining industry, the lower level of enrollment by women in engineering programs, the poor work-life balance as travels to remote locations and shift rotations are expected, and the male dominated culture which creates a gender bias.
This being said, times are changing and the mining industry is becoming more technology driven, which allows for more women to access the industry as less physical activities are required. Moreover, board seats, administrative and senior positions do not generally have the usual deterrents presented by the industry. Finally, women’s expertise in less technical fields such as finance, accounting, law, governments, environment, governance and sustainability can bring much added-value to a mining company.
Although things are improving, a survey entitled “Mining for talent 2015” which was conducted by PwC and the Women in Mining organization shows that the percentage of female directors in the top 100 listed mining companies (ranked by market capitalisation) was 11.1% and the percentage of female directors in the top 500 listed mining companies was 7.9%. The survey also mentions that, at the going rate, the top 100 listed mining companies will take until 2039 to achieve the recommended 30% threshold for women on boards, and the top 500 listed mining companies will take until 2045 to achieve the same.”
In order to trigger a change in the right direction, the Canadian securities administrators, other than those of British Columbia, Alberta and Prince Edward Island, amended National Instrument 58-101 Disclosure of Corporate Governance Practices to require non-venture issuers, who are in essence companies listed on the Toronto Stock Exchange (the “TSX-Listed Issuers”), to disclose board renewal and diversity policies pursuant to a new “comply or explain” model (the “Comply or Explain Model”).
Pursuant to such Comply or Explain Model, TSX-Listed Issuers have to disclose the following information in their Information Circular, if they solicit proxies, or otherwise in their Annual Information Form: (i) director term limits and other mechanisms of board renewal, (ii) the representation of women on the board, (iii) the consideration given to the representation of women in the director identification and selection process, (iv) the consideration given to the representation of women in executive officer appointments, (v) the issuer’s targets regarding the representation of women on the board and in executive officer positions and (vi) the number of women on the board and in executive officer positions. Should the TSX-Listed Issuers not have these mechanisms in place, they will need to disclose why.
The Comply or Explain Model may not be as proactive as gender quotas (which can range from 25% to 40% in certain countries, especially in Europe) but it is certainly sending a strong message to TSX-Listed Issuers that they have to rethink their selection process for board members and senior officers, through diversity policies or otherwise. Under the Comply or Explain Model, market forces and social pressure will ultimately decide whether the diversity policies adopted by companies are appropriate.
While there may be some growing pains for certain companies that have not prioritized board diversity in the past, studies have shown that diversity on boards of directors or in senior management positions results in better managed companies, improved financial performance, good corporate governance, better stability in a period of crisis, increased corporate social responsibility, more sustainability, enhanced level of creativity and innovation, progressive work environment which reduces turnovers and improves performance, a better understanding of the needs of the clientele and an improved corporate reputation.
Women remain a widely “untapped resource” that the mining industry should “explore” to improve its overall sustainability, especially when skill shortages are looming. Who knows, the mining industry might discover little gems!