Women in Business Fall 2017

30 | WOMEN IN BUSINESS—FALL 2017 PUBLISHED BY BUSINESS IN VANCOUVER
WHY THE GLASS CEILING
NEEDS MORE CRACKS
DEB ABBEY | Research shows having more women on boards and in senior management
roles leads to better corporate performance. Investors want more women too
You can decide
to work for
companies with
better gender
diversity policies
and, for added
impact, your
investments can
make a difference
You’ve probably heard a lot
about those cracks in the
glass ceiling. Most of us assume
that women are well represented
on boards and in senior
management in corporate Canada.
Turns out we’ll need a lot more
cracks if we want to break through
any time soon.
Despite the growing body of evidence
that gender diversity in the
boardroom leads to stronger financial
performance, Canadian women
hold only 12 per cent of corporate
board seats in Canada. And nearly
half of Canadian corporate boards
don’t have any female representation
at all.
There are a number of reasons why
companies with diverse leadership
are linked to stronger financial performance.
Research has shown that
having more women on boards and
in senior management leads to a
greater capacity for creativity and
innovation, employee productivity,
commitment, satisfaction
and a focus on customer needs.
These are all drivers of financial
performance.
A study by the Peterson Institute
for International Economics
and EY shows that
companies with at least 30 per
cent women in leadership roles
could increase profit margins by
15 per cent compared
to those with lower
levels of diversity.
That’s a big number
and investors are paying
attention.
A survey published by the Responsible
Investment Association
and sponsored by OceanRock Investments
Inc. looked at investor
perspectives on gender pay
equity and women
on boards. In it,
82 per cent of respondents
said
they believe women should be better
represented on boards and 73 per
cent said that they disapprove of
companies with zero or very few
women on their boards.
When asked about the gender pay
gap, 92 per cent of investors said
that women and men should receive
equal pay for equal work and 76 per
cent said companies should be required
to disclose how much they
pay women compared with men.
More than half of Canadian investors
would be willing to divest of a
company that does not pay men and
women equally for equal work while
another 25 per cent would consider
doing so.
“Having more women on boards
and in senior management is not
only about gender equity; it also
makes good business sense,” Fred
Pinto, CEO of OceanRock Investments
and vice-president and head
of wealth and asset management
at Qtrade Financial Group, said in
releasing the survey earlier this year.
“It’s good for the company and it’s
what investors want.”
The Ontario Securities Commission
has been paying attention to
investors’ concerns and, since 2015,
requires companies to “comply or
explain” their policies on gender diversity
on their boards and in senior
management.
Companies with diversity targets
had, on average, female board representation
of 25 per cent compared
to 10 per cent for those that did not
have a target. The results have been
positive but improvements are slow
in coming, with only marginal increases
in the percentage of women
on boards in the first two years.
Investors are part of the solution.
OceanRock Investments and
other responsible investors have
been asking Canadian companies
to improve their gender diversity
policies. It’s not a big ask. In most
cases they simply want the companies
to develop a formal diversity
policy that outlines how they plan to
increase the numbers of women and
minorities on boards and in senior
management.
In 2016, OceanRock Investments
and the Shareholder Association
for Research and Education filed a
shareholder resolution on gender
diversity with Restaurant Brands
International, owner of Burger
King and Tim Hortons. The proposal
garnered majority support
from independent shareholders and
16 per cent overall. They filed the
resolution again this year and overall
support increased to more than
22 per cent. Not a decisive victory
but it’s moving the company in the
right direction.
In addition to OceanRock Investments,
NEI Funds and IA Clarington
Inhance SRI Funds have engaged in
dialogue with companies and incorporated
board diversity into their investment
decision-making process.
In 2016, BMO launched its Women
in Leadership Fund, which invests
in North American companies that
promote gender-diverse leadership.
You can decide to work for companies
with better gender diversity
policies and, for added impact,
your investments can make a
difference.
Deb Abbey is the CEO
of the Responsible
Investment
Association. She was
the founder and CEO of
the first investment
management firm in
Canada to focus
exclusively on
responsible investment. She is the coauthor
of The 50 Best Ethical Stocks for
Canadians (2001 edition) and the author
of Global Profit and Global Justice: Using
Your Money to Change the World (2004).