The Business Case for Indigenous Inclusivity in the Boardroom

In Canada, the legal duty to consult is often considered key to bridging the gap between the interests of natural resource companies and the rights of Indigenous communities. The idea is that, if consultation is conducted effectively, both sides walk away with interests aligned, and projects progress without pause. In reality, however, this is rarely the case. Most natural resource projects face great difficulties in progressing past the consultation stage and may even fail to get off the ground.

While the duty to consult may seem simple enough, consultation can prove tricky and practice. Meaningful and informed consultation requires considering not only economic and employment opportunities for community members, but also other vital community values, such as social, spiritual, educational, and environmental. Often, it is difficult for companies to truly understand the community’s profound responsibility to protect and preserve resources for the next generations. To fulfill the duty to consult, corporate leaders – including directors, negotiators, executives and legal counsel – must be able to fully grasp the complex issues, interests and perspectives at hand – or risk a project stalling before it even starts.

While consultation can require resources in time, the payoff is clear: Creating meaningful and trusted relationships with Indigenous communities can reduce costly delays, win local support, and advance project development. With this in mind, it’s no wonder that natural resource companies are increasingly embracing early and active consultation as a way of reducing risk and improving the prospects of a project’s success. Many project teams boast their projects are actually improved because of the involvement of Indigenous communities.

However, even as companies look outwards to engage a diverse set of stakeholders, their efforts are often hindered by a lack of internal representation. A 2017 survey by the Canadian Board Diversity Council found that Indigenous professionals comprised only 1.1% of FP 500 executives across sectors. With key strategic decisions often made at the Board and executive level, this shortage of Indigenous talent at the top can have far-reaching consequences.

Consultation with Indigenous communities has long been a critical aspect of executive duties, and the inclusion of Indigenous voices can bring informed and valuable insight into this process. Many Indigenous executives come to the table with experience, knowledge and the trust of communities.

Having experienced and knowledgeable executives at the helm can help companies identify viable community partners, understand the unique perspective and history of the community partner, communicate and collaborate in a culturally respectful way, plan for potential setbacks, and establish tailored consultation and operations plans. Likewise, trust is key to relationship building, unlocking the potential for increased access, open communication, and effective negotiations with communities. As Indigenous communities play a more integrated role in the natural resources sectors, you can be sure that they’ll notice whether proponents have successfully hired and retained Indigenous people in their senior ranks.

Not only can diverse senior leadership increase the projects chance for success, but it can also create a trickle-down effect in terms of talent. The Indigenous workforce is the youngest and fastest growing population in Canada, making up 4.9% of the country’s entire population, with nearly half of that under the age of 25, according to StatsCan. Young Indigenous professionals are eager and ambitious, seeking out opportunities for advancement and for mentorship by trusted and reputable senior leaders. At the same time, they are also socially responsible, preferring to work within companies that are known for creating positive connections to their communities. Companies that demonstrate inclusivity at the top advance their ability to attract and retain Indigenous talent at all levels, finding themselves well-positioned to tap into this pool of next-generation talent.

There are vast opportunities for mutually beneficial business relationships between natural resource corporations and Indigenous communities in Canada. By now, Canadian natural resource companies know that executing a successful operation requires careful planning, decisive leadership, and most importantly, early engagement with impacted Indigenous communities. As they pursue projects, these companies often pour huge sums into planning, physical capital, and community consultation efforts. But for those efforts to succeed, it’s time that companies look inwards to invest in Indigenous talent strategies – starting at the top.

Brock Higgins is a Partner at Leaders International. To read this article in Canadian Mining Journal, click here.

Leaders International