DIVERSITY EQUALITY INCLUSION2

Mandating quotas will ensure women have a spot at the C-suite table

Germany’s coalition government recently voted to enforce quotas for women in senior management of the country’s public companies.

Next year, management boards with more than three members must have at least one woman. This is not a company’s board of directors, but their most senior management team. In other words, the C-Suite officers with the real day-to-day power.

Germany did this because its volunteer program of persuasion, in place since 2015, wasn’t working. A September survey found that while in the United States, women make up 28.6 per cent of top management in the largest American companies, and in Britain they make up 24.5 per cent, in Germany only 12.8 per cent of the most senior corporate leaders are women. Worse still, the number of senior executive women in Germany fell by 21 per cent from last September to this.

It was time for coercion. In other words, quotas.

Many German public companies fought them by saying there aren’t enough qualified women to serve in top management. But at least they didn’t do what Norwegian companies did in 2008 when the government imposed compulsory quotas for women to make up at least 40 per cent of a public company’s board of directors. There, 384 of Norway’s 563 publicly traded companies took themselves private in order not to comply.

So how are women faring in Canada’s C-Suites?

According to Catalyst Canada, “Women represented an average of 17.9 per cent of executive officers in S&P/TSX Composite Index companies as of December, 2019.” But when you reduce that index’s approximately 250 companies to the 100 largest publicly traded Canadian companies this year, that percentage falls to just 8 per cent (43 of the 538 named executive officers). As in Germany, that number for women has declined in Canada from last year, when it was 53.

In other words, Canada’s C-Suites may be ripe for the very kind of quotas that Germany just imposed.

All the more because this fall the law firm Osler, Hoskin & Harcourt LLP issued a report on diversity and leadership at Canadian public companies. It revealed that the overall percentage of female executive officers has risen from 15 per cent five years ago to 17 per cent today. At this pace, by my calculation, women will populate half the ranks of senior management sometime around the year 2185.

But even more shocking, the Osler report revealed that in 2020, 33 per cent of the 526 disclosing public companies in Canada have exactly no female executive officers. None.

This news means that in 174 of Canada’s largest companies, a group of men (overwhelmingly white and middle-aged) sat around a table at the monthly senior executive meeting and…

  • Didn’t find it odd that there were no women at the table? Not one?
  • Debated the merits of having women (or even just one woman) join them, but decided not to?
  • Admitted that women should join them, but felt that no woman was qualified just yet to join their august company?
  • Endured public abuse from shareholders during their AGM for having an all-male senior management team?
  • Did not comment on the massive social change brought about COVID-19 or even think it had any connection to their business?

Are. You. Kidding. Me? I ask because, in light of the last point, if there’s any group whose progress has stopped dead in its tracks because of COVID-19, it’s women.

In September, McKinsey & Co. issued a damning report on Women in the Workplace 2020. It finds that in the United States today, “more than one in four women are contemplating what many would have considered unthinkable just six months ago: downshifting their careers or leaving the work force completely.”

In fact, its thesis is that COVID-19 could set women back half a decade. Talk about the great unwinding.

All the more reason for Canadian regulators to think about mandating quotas to get more women into C-Suite jobs where their decisions can directly affect the lives of their female employees and customers.

But aren’t quotas unfair? Yes, they are, but not as unfair or negative as blatant sexism.

Aren’t quotas un-Canadian? Far from it. Quotas exist everywhere, from Canadian songs on the radio, to Canadian players in the CFL, to Canadian jobs building our new American fighter planes.

And while we’re at it, can we change how we report all these statistics?

So, rather than saying “women now hold 17.9 per cent of C-Suite jobs,” we should be saying “men continue to hold 82.1 per cent of all senior management positions.”

If we do this, suddenly we’re no longer talking about a women’s issue; we’re making it a men’s issue by putting them in the middle of it. After all, the overwhelming majority of senior management and board members who decide whether a woman is suitable for C-Suites are men.

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