The 11th Annual Rosenzweig Report on Women at the Top Levels of Corporate Canada

The Annual Rosenzweig Report on Women at the Top Levels of Corporate Canada looks at the 100 largest publicly-traded companies in Canada, based on revenue, and examines how many of the top-paid leadership roles are held by women. 

The Annual Rosenzweig Report on Women at the Top Levels of Corporate Canada
looks at the 100 largest publicly-traded companies in Canada, based on revenue, and
examines how many of the top-paid leadership roles are held by women. 


“Because it’s 2015.”

– Canadian Prime Minister Justin Trudeau answering a reporter’s question on why half his cabinet is made up of women

As we roll into 2016 with the possibility of the first female president in United States history on the horizon, we have heard three simple but powerful words from the Canadian Prime Minister. These words have been repeated many times since Justin Trudeau uttered them on November 4, 2015: “Because it’s 2015.”

It’s time to find answers; time to end disparity between genders in business, politics, and society; time for change. A new mammoth study of global companies affirms that ending this disparity is also good for business. Forging gender equality has been far more elusive than many think, despite men like Mr. Trudeau now making it clear that this is not simply a women’s issue; it’s everybody’s issue.

For more than a decade, Rosenzweig & Company has been watching developments at the C-level of Canada’s biggest corporations – the highest leadership levels – and we’ve consistently published our findings year after year. We focus on senior executive positions for three reasons: first, there is other good research in Canada focused on board diversity, but much less on the most senior executives; second, women have made gains on Canadian boards of directors, now up to 20 percent, but the advances for female executives have been much slower; and third, though boards oversee a company, it’s the senior executive team that runs the organization and develops its culture, and both of these things are extremely important when it comes to change. 

With more than a modicum of regret, we have to say it’s a shame that Canada’s biggest corporations don’t appear to share Mr. Trudeau’s belief, or follow his example, when it comes to offering leadership roles to more women.

For 11 years, we’ve been tracking the number of women in leadership roles at Canada’s 100 largest publicly-traded corporations and equality remains a pipedream. Where Trudeau’s cabinet is 50-50 men and women, the top executives of Canada’s 100 largest publicly-traded companies are 92 percent male and a paltry 8 percent female, a slight drop this year over last year’s results.

Put another way: in this reporting year, there are 526 Named Executive Officers (‘NEOs’) at Canada’s 100 largest publicly-traded corporations. NEOs are the CEOs, CFOs, and other C-level executives named in management circulars. They are typically the most influential executives running a company – the leaders. Of the 526 executives, 42 are women and 484 are men. Compare that disparity to Mr. Trudeau’s cabinet ministers: 15 women and 15 men.

Of the 100 largest companies, 66 have all male NEOs with not a single woman in a leadership role at the top. Men are actually expanding their power base because there were 65 companies with all-male leaders last year. Every company has a majority of male NEOs, and usually a vast majority. Just Energy Group had the largest percentage of female NEOs with three out of seven (43 percent).

Unfortunately, the news gets worse the higher we climb: the bigger the company, the fewer women in leadership roles. Of the 25 biggest publicly-traded companies in Canada, there are 132 NEOs, and only four of them are women, or a trifling 3 percent. That means at the ‘biggest of the bigs,’ 97 percent of the top executives are men – despite it being 2016. Twenty-one of the 25 largest public companies in Canada are led exclusively by men.

If you look at the corner office, there are but six female CEOs occupying seven positions among the 100 largest publicly-traded companies, which is one less than last year. (Nancy Southern holds the CEO title at both Atco Ltd. and Canadian Utilities). Karen Sheriff, former CEO of Bell Aliant, fell off the list this reporting year after taking over on January 5, 2015 as President and CEO of Q9 Networks, a privately-held company not on our list.

Study after study points towards businesses flourishing and becoming more competitive  as women, with their diverse points of view, rise to leadership roles within corporations. More women in boardrooms and executive offices are proven to complement operations, yet corporate Canada just can’t seem to bring itself to promote talented women anywhere near the rate at which Mr. Trudeau has done.

And a new study from the Peterson Institute for International Economics, a nonprofit-non-partisan think tank, and EY indicates Mr. Trudeau is truly onto something. Peterson and management consultants EY analyzed results from 22,000 global, publicly-traded companies in almost 100 countries and found that companies with at least 30 percent women in leadership positions add 6 percent to net profit margin. 
The largest study of its kind unveils an unequivocal truth: more women in leadership roles translates into higher profits. This is something that we have been conveying for the past 11 years.

However, despite our message, a disturbing pattern has emerged over the 11 years of the Rosenzweig Report on Women at the Top Levels of Corporate Canada (‘the Rosenzweig Report’): one year there’s a slight gain, and then the next is a step back, followed by improvement the next year and then another step back. Time and time again this has occurred for more than a decade. There was only one year that the numbers did not dip at all. (See chart in this report.)

Over the past decade, last year was the year that we were most optimistic. Both the numbers and external forces promoting equality made us feel hopeful, more excited, and more energized that real and lasting change would be coming, and that an elusive tipping point was within range. Alas, one year later, we have again regressed and frustration returns.

2015 was the first year of ‘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; and to explain steps that have been taken to promote the inclusion of more women in senior roles. Two leading law firms – Torys LLP and Osler, Hoskin and Harcourt LLP – closely looked at how issuers are responding to the ‘comply or explain’ regulations in the middle of 2015, and their reports illustrate that there is still significant progress to be made. “The overall picture is disappointing,” declares Osler in its initial report. Torys found that only 56 percent of S&P/TSX companies that filed proxy circulars even had policies to promote women and only 13 percent had measurable targets six months after the law took effect.

Corporate Canada should beware that if the pace of change doesn’t pick up soon, mandatory quotas could be coming, either from the federal government or elsewhere. The OSC, for example, told the Canadian Bar Association’s magazine National that it will assess the ‘comply or explain’ effectiveness by the end of 2017. If progress is deemed too slow, the OSC promises “further amendments … or other regulatory action,” reports the National.

“Quotas are not part of our cultural makeup and I’m still not calling for mandatory quotas, but I certainly am not ruling them out given the slowness of action when it comes to aspirational goals and targets,” says Jay Rosenzweig, Managing Partner of Rosenzweig & Company, and the person who initiated this survey and has driven it over the past 11 years.

Further, if Justin Trudeau’s experience is anything to go by, many concerns about quotas’ negative implications could be largely ungrounded. In an interview on January 22 at the World Economic Forum in Davos, Mr. Trudeau addressed the concerns his critics had raised about quotas. He acknowledged that during “the lead up to the announcement of that cabinet, there were a lot of people making [comments like]: ‘these quotas are bad, it should be merit-based,’ and ‘you shouldn’t be forcing it,’ and then once [we] displayed the cabinet, nobody talked about merit anymore because the people in the cabinet, men and women, are extraordinarily qualified.”

It’s worth comparing Canada to Germany, another country that resisted quotas and promoted aspirational goals and targets. This changed in March 2015, when Germany became the largest economy in the world to implement mandatory quotas for women in leadership roles. The boards of directors of the 100 largest German companies must now be comprised of at least 30 percent women. Germany “will also require about 3,500 large firms to announce public targets for increasing the number of women in leadership roles, from managers to boards of directors,” reports the Globe and Mail. “Germany’s two-pronged approach aims to jump-start a broader cultural change and not simply correct the imbalance in boardrooms. The country has a dismal track record when it comes to female executives. At Germany’s 200 largest companies, just 5.4 percent of the top echelon of management is composed of women.”

When the first Annual Rosenzweig Report on Women at the Top Levels of Corporate Canada was published in 2006, the number in this country was at 4.6 percent. Moving to 8 percent over 11 years is still not something to brag about when it comes to expanding opportunities for women in leadership roles.

Over the past decade since our inaugural publication, many European countries beyond Germany have implemented official quotas for women in leadership roles in business, including France, Spain, Italy, Belgium, and Norway.

Norway was a pioneer of official quotas, which the country first introduced in 2006. When they did this, hundreds of companies de-listed or became private. There was a hue and cry against quotas for the first few years. But as quickly as the debate had risen, it died down. The quota system has been successful in many respects, and has gained broad acceptance, even among the old guard male CEOs and board members.

“As a principle, I don’t like quotas,” Ider Kreutzer, the former chief executive of Storebrand, a Norwegian insurance group, told the Financial Times. “But I have not been able to find any big problems with the legislation in practice.” We’re not lining up behind mandatory quotas. In Canada in 2015, we saw the launch of the 30% Club, a global group advocating more women in senior business roles. 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’s inching closer in the U.K. and its presence in Canada can only bode well to increase the women on corporate boards higher than its current 20 percent or the lowly 8 percent we find in executive offices.

We are also seeing social changes and endeavors putting pressure on the ‘old boys’ network’ to open up and promote women. Beyond Mr. Trudeau’s 50-50 cabinet and his Davos statements, he has repeatedly exhibited bold leadership in this area, including poignant comments on March 8, International Women’s Day 2016. “Men have a key role to play in demanding and supporting this societal shift. We need to be a part of the conversation. We need to speak out in support of gender equality. We need to be comfortable identifying ourselves as feminists,” Mr. Trudeau wrote in the Globe and Mail.

There are many other examples of men needing to take up the baton, including the United Nations appointing actress Emma Watson as a goodwill ambassador for women and she’s launched the #HeforShe campaign urging men to step up because gender equality is about all of us, not just women.

“Men,” Emma Watson said in a UN speech announcing the #HeforShe campaign, “I’d like to take this opportunity to extend to you a formal invitation. Gender equality is your issue, too. Because to date, I’ve seen my father’s role as a parent being valued less by society despite my needing his presence as a child as much as my mother’s. I’ve seen young men suffering from mental illness unable to ask for help for fear it would make them look less ‘macho’ – in fact in the UK suicide is the biggest killer of men aged between 20 and 49. I’ve seen men made fragile and insecure by a distorted sense of what constitutes male success. Men don’t have the benefits of equality, either.”

There was also the oft-publicized 2015 Academy Award speech by best supporting actress winner Patricia Arquette demanding equality for women in Hollywood and elsewhere. There are a growing number of programs like Canada’s Judy Project that are networking, mentoring, and training programs aimed at helping women succeed in business at the highest levels.

Then there’s Hillary Clinton, still the frontrunner to be the Democratic candidate for the office of the President of the United States in November. As her husband, former President Bill Clinton, quipped: “I want to talk about one barrier that has not been broken. I want you to support Hillary for me, too. I want to break a ceiling. I’m tired of the stranglehold that women have had on the job of presidential spouse.”

Adds Jay Rosenzweig: “There is a lot of change coming and let’s hope corporations realize this soon and start giving bright and talented women the opportunities they deserve in leadership roles at a much faster pace. Let businesses follow Justin Trudeau’s lead voluntarily instead of compelling the Prime Minister to force business to follow.”

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