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2015 EXECUTIVE SUMMARY
“In the future, there will be no female leaders. There will just be leaders.”
– Sheryl Sandberg, Lean In: Women, Work, and the Will to Lead
This is our 10th annual report and at no time during the past decade have we been more hopeful, more excited, more energized about the fact that real and lasting change is coming when it comes to gender equality in business. It’s not only as a result of the numbers we’ve unearthed, including a record high number of top executives being women, but a result of external events that we believe bring us closer to a tipping point towards gender equality in the highest corporate offices.
For ten years, we’ve tracked the progress of gender equality in the top offices of Canada’s biggest and strongest publicly-traded corporations. We believe in the trickle-down effect: If things become more equal at the top in business, it will have important benefits throughout society, from closing the gender wage parity gap at all levels to improving competitiveness and profitability for Canadian businesses, which lifts the standard of living for all Canadians.
Studying the Canadian corporate landscape and shining our own flashlight on gender equality is one way we can consistently track the development of what Sheryl Sandberg, Facebook’s COO and founder of LeanIn.Org refers to as changing the world to simply create more leaders, not labelled female leaders. “We cannot change what we are not aware of, and once we are aware, we cannot help but change,” Sandberg writes in Lean In. “The promise of equality is not the same as true equality.” We agree totally.
We believe in incremental change and by promoting gender equality in Canada, and specifically in Canadian business, it can further the movement towards gender equality around the world. It’s similar to the butterfly effect where the flapping of wings in far-off places can impact weather patterns on the other side of the world.
In the 10th Annual Rosenzweig Report on Women at the Top Levels of Corporate Canada (“the Rosenzweig Report”) we have a record number of women in high office – 45 female NEOs (“Named Executive Officers”) who lead the 100 largest public companies in Canada as measured by revenues. That’s the good news.
The flip side is that represents a mere 8.5 percent of the total high-office jobs. For our 10th Rosenzweig Report we’re approaching 10 percent, but as a nation we are not there yet. We were hoping for a “10 at 10” headline for our tenth annual report; we got close. When we started this work way back in the fall of 2005 and early 2006, the number was a paltry 4.6 percent. The number has almost doubled in a decade.
There are many external events which give us optimism for 2015 and beyond. Perhaps the most important is the new “Comply or Explain” regulations from the Ontario Securities Commission (“OSC”) that began on January 1, 2015.
The new rules compel every company listed on the Toronto Stock Exchange to report the number of women both on their boards of directors and in senior executive positions. The Rosenzweig Report has focused on senior executive positions for two reasons: first, there is other good research in Canada that is focused on board diversity, but much less on senior executives; second, though boards oversee a company, it’s the senior executive team that runs the organization and develops its culture; both those things are extremely important when it comes to change.
The OSC’s new rules also require all companies to disclose whether they have internal targets for women and what they are. If companies don’t have targets, they are asked to explain why.
Reporting on the number of women in senior executive positions is what we’ve been doing with the Rosenzweig Report for the past ten years. The OSC goes even further, beyond the largest 100 companies we’ve been keeping an eye on. We’re proud that our work may have played a small role in the adaptation of these new regulations.
We’re also hopeful that the new regulations mean that we may one day simply “work ourselves out of a job.” If that’s the case, and the regulations do create the effective changes for gender equality, nothing would make us happier than ceasing to do these reports every year. But until that happens we’ll remain vigilant and continue to stay focused on the number of women in the top levels of corporate Canada, just as we’ve done for the past decade. We cannot predict when things will change enough to make our reports unnecessary; perhaps in three years, or in five years, and hopefully before another ten years. Regardless, we look forward to seeing positive changes in future Rosenzweig Reports.
We’ve always believed in voluntary changes through education and public awareness, not quotas, as many European countries have enforced. In Norway, where quotas were first introduced, hundreds of companies de-listed and only 6 percent of CEOs are women, proving there is a better, more effective way, according to the international 30% Club, which launches in Canada in 2015 (more on this in a moment.) The new OSC regulations announced last October strike a terrific balance between voluntary change and quotas.
In announcing the new rules, OSC chairman Howard Wetston told the Globe and Mail’s Janet McFarland, one of the media’s biggest advocates for change on this issue:
“We did not see sufficient leadership from public company boards, and we felt that leadership from government would be necessary to achieve these goals for women on boards and women in business.”
We agree and hope the new rules will be enough to ward off the need for quotas in the future.
Canada’s federal government also stepped up in 2014 and urged companies to hit the 30 per cent level for women on boards by 2019. In a classic carrot-before-the-stick maneuver, the government made it clear it prefers voluntary increases but doesn’t rule out imposing hard quotas, if need be.
In releasing a report entitled Good for Business: A Plan to Promote More Women on Canadian Boards, Dr. Kellie Leitch, Minister of Labour and Minister of Status of Women said: “The Government of Canada believes that increasing economic opportunities for women, including increasing their representation on corporate boards, makes good sense for Canadian women, and for our economy. I am confident that the Advisory Council’s report will help engage Canadians in the effort to advance more women than ever before into positions of leadership.”
And speaking of 30 percent, the 30% Club, a global group advocating more women in senior business roles, announced it will open a Canadian chapter within weeks of the release of the Rosenzweig Report. Veteran corporate director Spencer Lanthier has been named the first chair of the Canadian chapter.
The 30% Club originated in Britain in 2010 with the aim of getting the levels of women in executive management and on the board to a minimum of 30 percent. It “is a group of business leaders committed to achieving better gender balance at all levels of organizations, because we believe this will make businesses and boards more effective,” according to its website. “The 30% Club is a collaborative and constructive effort; it is not a diversity business. There is no charge for membership. Activities of the 30% Club have been financed through the generosity of a variety of firms, on an entirely voluntary basis.”
Like Rosenzweig & Company, the 30% Club does not favor quotas and hopes to have 30 percent women on British boards and in executive offices by the end of 2015. Women represent 23 percent of board seats in the United Kingdom, compared to only 13 percent in Canada. The 30% Club’s lofty goal is commendable, as is the organization’s strong volunteer core who work to push the boundaries. We look forward to working with the 30% Club’s Canadian chapter in any way possible to help achieve our shared goals.
Two important university studies were released last year that have potential to improve gender equality in business, and they deserve mention.
The first came from the Harvard Business School that studied 6,000 Harvard MBA graduates between the ages of 26 and 67, both men and women. The findings were startling in many ways.
According to the report, women need to “bridge the confidence gap” in the workplace, and when they marry, they must find real partners who will share career aspirations and goals and, importantly enough, household work.
The majority of men, even young men in their 20s, still view their career as a higher priority than their wife’s career, according to study. “Women were likely to have egalitarian expectations – and to see their expectations dashed,” according to the report published in the Harvard Business Review in November.
Surprisingly, men in their late 20s and early 30s were not thinking in egalitarian terms as much as we might think; half still believe their career is more important and two-thirds expect the wife to be the primary childcare parent.
“A report like this from an esteemed school like Harvard is important for a number of reasons,” says Jay Rosenzweig, Managing Partner of Rosenzweig & Company. “It breaks down falsehoods. We tend to think younger generations are more enlightened, more equal on gender issues, but we really do have a lot more education to do on the road to gender equality.”
Another report came out from Simon Fraser University in British Columbia that showed that companies with even one woman on the board of directors are better governed than boards without any female representation.
Simon Fraser business professor Judith Zaichkowsky, author of the report published in the International Journal of Business Governance and Ethics, concluded more women directors are still needed but just one woman on a board encourages greater focus on good governance.
Zaichkowsky’s report meticulously looked at how companies in the S&P/TSX composite index scored in The Globe and Mail’s annual Board Games ranking of corporate governance practices between 2004 and 2012. The Globe ranking has been overseen by reporter Janet McFarland, mentioned earlier in this report for her work on gender issues. The Globe’s annual ranking looks at dozens of factors related to corporate governance practices in areas such as board composition, ownership, compensation, disclosure and shareholder rights.
We would also like to tip our cap to another Canadian pioneer in this area, Rosenzweig & Company Advisory Board Member Judith Humphrey, for the release of her new book in November entitled Taking the Stage. Ms. Humphrey argues that the most important thing career-minded women can do is “take the stage” at meetings and presentations and confidently let their voices be heard.
Over her 25-year career as an executive coach, Ms. Humphrey’s program of teaching women presentation skills and confidence in the corporate arena has reached over 400,000 participants around the world. Her book will reach tens of thousands more.
“Judith should be applauded for all her work in helping women achieve their goals and dreams and for being another voice calling out for gender equality,” says Jay Rosenzweig.
Those are just some of the reasons why the 10th Rosenzweig Report is filled with more hope and excitement than any of the previous nine reports.
“As a father of a son and two daughters, I want all three to have the same opportunities, and I’m confident it’s getting closer each and every year that we do these reports,” adds Jay Rosenzweig.
The 10th Annual Rosenzweig Report on Women at the Top Levels of Corporate Canada: Download the Complete Report to "look at the numbers in more detail."