September 12, 2017
By: Deb Abbey
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% 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% of women in leadership roles could increase profit margins by 15% 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. 82% of investors said that they believe that women should be better represented on boards and 73% said that they disapprove of companies with zero or very few women on their boards.
When asked about the gender pay gap, 92% of investors said that women and men should receive equal pay for equal work and 76% 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% would consider doing so.