The most common thing about New Year’s resolutions is how quickly they evaporate, usually because they’re ideas without a plan.
Setting a goal is one thing. Putting together a strategy of how to get from here to there is the path to lasting change. This is clear in the slow work to bring greater diversity to the world of corporate Canada, whether on boards of directors or in the executive suites. Companies that set targets and deploy strategies are the ones that achieve change.
Too many companies, however, are not doing the necessary work. Corporate boards and executive offices are no longer the singular domain of white men, but there’s a long way to go to bring more women and others – especially Indigenous people – into the ranks of top decision-makers. It’s about strengthening businesses to better operate in a world where challenges must be grappled by a more diverse group of people with different ideas and varied experiences.
Canada made two important changes in recent years, centred on disclosure. It’s a basic first step: Quantifying where you’re at is key. Disclosure rules have helped propel progress, seen in annual surveys such as the law firm Osler Hoskin Harcourt’s diversity disclosure report last fall and The Globe and Mail’s Board Games in December.
As recently as the early 2010s, almost half of companies in the S&P/TSX index had no women at all on their boards. It wasn’t until 2022 that all index companies had at least one woman director. Larger companies have led the way. Among companies in the index, women hold 36 per cent of the board seats. Among TSX-listed companies, the number is 29 per cent, up from 26 per cent a year earlier, Osler reported. Compare this with the United Kingdom, where 40 per cent of board seats at large public companies are held by women.
Change is happening – but it’s not happening quickly enough. Of 532 reported board positions filled in the latest report, women were chosen for 45 per cent of the spots.
The percentage of women serving as corporate executives is lower but has edged up to 20.8 per cent, among companies that disclose the information, from 19.8 per cent. But women as CEO is still low, one out of 20. As The Globe’s Power Gap series in 2021 found, there are more men named Michael who work as CEOs at top companies than women of any name.
Broader representation remains lacking. Osler reported members of visible minorities (the term used in federal regulations) held 10.2 per cent of board positions in 2023, up from 8.3 per cent in 2022. Indigenous peoples were unchanged at 0.9 per cent. In late 2022 this space argued the absence of Indigenous voices on boards of directors is a major shortcoming, given how often Indigenous rights and other related issues intersect with the corporate world.
Getting all this information in public is an important step. A lot more needs to be done in setting goals. Osler showed that less than half of TSX companies have a target for women on their boards and, for those that do, the target is typically a lacklustre 30 per cent – effectively declaring a board with a large majority of men is the goal. For executives, barely one out of 10 companies have a target and it’s generally low, 30 per cent or less. Yet some companies still try to sidestep these issues, asserting it undermines a focus on merit and claiming targets are ineffective or arbitrary.
Strategies to drive change are also essential. There’s no magic here: it requires recruitment, mentorship, training and partnerships.
Change also needs to extend beyond the boardroom, from promoting a broader array of talented people in middle management to a focus on education. Appointing Indigenous people to boards is one thing. Increasing the rate at which Indigenous children living off-reserve finish high school – currently 73 per cent compared with 90 per cent for non-Indigenous children – is crucial.
Ottawa’s child care program – a needed policy change cited in the Power Gap series – may be helping. The labour force participation rate in December among women age 25 to 54 was 85.3 per cent. It is up from 84.1 per cent five years earlier and 82.7 per cent five years before that. The gap between men and women has narrowed to 6.7 percentage points from 8.2 a decade ago. According to a McKinsey study, gender equality could add tens of billions of dollars to the economy.
Corporate Canada has made some progress in diversifying its top ranks but companies need to redouble their efforts. Resolutions are easy. Lasting change is the real goal.