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Q&A Series with Women on Boards

Catherine Heath

Catherine Heath: “Diversity has to be a stated objective at every level, and the organization really needs to have paths for women to succeed.”

Catherine Heath is a Vice President, Portfolio Manager at Leith Wheeler Investment Counsel. Catherine’s career spans 20 years, most of which has been spent on the institutional fixed income desk servicing institutional and private clients. She is a co-founder of the Vancouver chapter of Women in Capital Markets, a past President of CFA Society Vancouver, and former Director at Capilano University Foundation and University Investment Committee. In addition, she also serves on the Beedie Endowment Asset Management program at Simon Fraser University and sits on the SFU Business Dean's Advisory Board. Catherine is also a director of Ballet BC and sits on their Finance and Audit Committee.

Q: What drew you to the wealth management industry?

A: I had a very keen interest in Economics. I pursued a joint major in Economics and Finance at SFU, where I was passionate about looking at macroeconomic variables and trying to figure out the path of interest rates and the path of growth and inflation. This led me into a career in the finance industry, specifically in fixed income. I was very fortunate to start with Leith Wheeler right out of university. I was going to pursue my MBA, but a very wise professor recommended that I spend a couple of years in the industry first. Actually, I never did an MBA, I did my CFA instead and stayed with Leith Wheeler. I have been here for 20 years, with most of that time focused on institutional fixed income trading and portfolio desk making decisions about the selection of corporate bonds and structure of portfolios. More recently I have moved into a portfolio management role, working closely with our institutional clients on their asset mix and strategic direction.

Q: How did you get on your first board?

A: I started as a board member for a relatively small organization called the Downtown Networking Association, a professional women’s organization in Vancouver. It was a great way to get my feet wet figuring out corporate governance and the role of a board, Robert's Rules of Order and how the board meetings are conducted. Next, I volunteered in a much bigger role on the CFA Vancouver board, an industry organization for approximately 1500 Charted Financial Analysts in Vancouver. That was a much more involved role in which I had to use skills I had learned from the Downtown Networking Association. I became President of CFA Vancouver Society in 2008, one of a few female presidents in the organization’s history.

Q: What type of boards have you served on?

A: My role as a portfolio manager prohibits me from serving on a corporate board, so I have served on non-profit boards to-date. Generally, smaller boards tend to be more operational in nature. For example, the Downtown Networking Association did not have paid administrative staff whereas CFA Vancouver had two full-time paid employees. When you are freed-up from doing the operational work you are able to focus on strategic objectives. This is my preference as it allows my volunteer hours to have the biggest impact.

Q: In your experience, how relevant has the idea of board diversity and inclusion been during your board service over the years?

A: I find that board diversity makes a huge difference because drawing on different backgrounds and perspectives enriches the quality of the decision making at a board level. When I joined the CFA Vancouver board, approximately 15% of CFA charter holders were women with only 10% representation on its board. Gender diversity and inclusion really change the dynamics at the table and encourage other women to join. It is difficult to be the lone woman on a board, but when you have one, more start to come and get encouraged. Diversity broadens the depth of the discussion, men start to take notice and it perpetuates itself. Quite often board positions are not filled via skills matrix or objective decision making, and typically when a board seat becomes available the board members ask around the table “Who do you know to fill the seat?” Often, it is a man that they know, that looks like them and thinks like them. I do not want to say that that is not a strong qualified candidate; however this kind of thinking perpetuates itself and women tend to get overlooked because they are not a part of the immediate circle of the existing board members. Diversity does at least 2 things: it broadens the decision making and expands the pool of candidates who would like to join the board.

Q: How do you recommend people get involved in serving on boards? How do the boards you serve/served on source new members?

A: Even if you are in a job that you are satisfied with and you do not see a purpose in networking for career advancement, I still think that networking is extremely key if you have an interest in being involved on boards. A lot of the time positions are not filled by a full public search so definitely let your network know that you are interested and try to get out to the environment outside of your comfort zone and your immediate circle. I make attempts to go to events that are in the industry that I have an interest in getting involved on a board. Start small – volunteer at an event because it is really tough to immediately get a board role. Express an interest in getting involved in a capital campaign or a gala dinner and then the organization will get to know you and make a better assessment whether you are eligible for board membership. Choose the organization with the cause that you are passionate about and find a good fit.

Q: What preparation do you recommend that people undertake before interviewing for a board?

A: I recommend getting to know as much as you can about the organization, who the current board members are, their backgrounds, looking into the financial statements, reading publicly available information and getting to understand what the organization is about and how it ticks. More broadly, I would recommend taking courses. I have taken a 3-day intensive not-for-profit course offered by the Institute of Corporate Directors (ICD.D) where I learned about corporate governance. One of the huge benefits of ICD.D is the network that you make and when you are ready to serve on corporate boards this might be very beneficial.

Q: From your own experience, what are some best practices that help to encourage diversity on boards and among management?

A: We really have to move away from the “who you know” style of recruitment of board members. Boards would really benefit from using a skills matrix or something that is more objective. Perhaps when boards are looking to fill a specific role they should try to go with someone that they are a little bit less comfortable with because this candidate would not be their direct companion and there would be no personal relationship. I also do think that the goal of diversity has to come from the top and be embedded in the culture of the entire organization, so not just the board level but also the management level should reflect the diversity the firm is aspiring to. I think a firm really needs to have paths for women to succeed and go up the ladder and diversity has to be a stated objective at every level of the organization.

Currently there are no quotas in Canada but there are “comply or explain” requirements by Canadian securities regulators that have been in place for a few years. Generally, they have not been all that effective as we have seen board diversity creep up very slowly. I think by all accounts it is quite disappointing the progress that Canada has made on the corporate diversity front. Perhaps quotas are the answer as they have been successful in some European countries but it would be nice to have something that does not need to be forced upon corporations, so creating broader awareness of the challenges of board diversity and the lack of thereof is important. Also, institutional investors – e.g. pension funds – can impact change by asking whether diversity issues are being addressed by the companies they are investing in. I’m optimistic that pressure from the government, shareholders, industry, along with increasing awareness and movement towards gender parity will mean we do not need to go down the route of a quota system.

Interview by:
Elena Tikhomirova, Director Strategic Initiatives - Women on Boards