Advancing women asleaders

Pillar 5

Advancing women as leaders in the private sector

The commitment among top Canadian and U.S. companies to advance women has never been higher.[1] And yet, the advancement of women continues to be very slow overall, and particularly at the top. Just seven of the 249 companies (2.8%) listed on the Toronto Stock Exchange’s main index have a woman CEO.[2]  Women currently hold just 5% of CEO positions at S&P 500 companies.[3]

This report finds that despite the commitment to advancing women, many companies across Canada and the U.S. are lacking clear goals, the ability to measure progress or accountable leaders to drive progress. There is a real opportunity to accelerate the advancement of women by closing the gap between commitment and action. The good news is that significant research exists to guide companies in creating action plans that can accelerate the slow progress that has been made to date.

Diversity drives financial performance[4], innovation[5], and helps close the gender pay gap[6]. As companies continue to experience significant disruption from technology, we expect the business case for diversity to grow even stronger with the increased need for innovation.

Business leaders should recognize these advantages to gender diversity and make it a business priority and have a strategy to achieve it.

A BUSINESS PRIORITY

In order to advance more women to leadership positions, we recommend companies follow the lead of the “High Risers” – the 26% of companies surveyed that reported their company is making either “some” or “rapid” progress in the advancement of women in their organizations. The report identifies five key elements of a strategy for achieving gender diversity in leadership:

1. A business priority and leadership commitment: C-suite executives should decide that the advancement of women is critical to achieving the company’s business goals, and then clearly articulate their commitment to employees. 84% of High Risers report that their leadership is committed to gender diversity, compared to just 48% of other companies.

2. Capture data and measure progress: This research reveals a lack of essential data that could measure progress and identify potential obstacles to the advancement of women, such as high attrition rates among new mothers or the differences in attrition between men and women. High Risers collect data and utilize metrics at a higher rate; 58% of them track five to eight metrics, compared to 28% of other companies.

3. Hold leaders accountable: 67% of CHROs in Canada and 72% in the U.S. say there is someone on the senior leadership team who is accountable to the board on issues of gender equality. Beyond accountability to the board, the lack of basic measurement and plans for the advancement of women to senior leadership roles indicate that companies are not holding leaders across the business accountable for making progress.

4. Set targets: 67% of companies with six to eight targets report making progress in the representation of women at the executive level over the past five years, compared to just 40% of companies with zero to five targets.

5. Leverage existing research to create action plans: There are many research studies published, including reports by Catalyst and multi-year studies by Accenture and McKinsey/Lean In, that identify the actions a company should take to have a more diverse and equal workforce. Companies can use this significant body of research and insights to help them design their action plans.

Building a Culture of Equality

A culture of equality helps both women and men advance faster and rise, contributing to overall growth for organizations. In fact, Accenture’s Getting to Equal 2018 global research shows that in equality-boosting cultures, women are 35% more likely to advance to the manager level and beyond, while men are 23% more likely to do so.

To drive results, companies must set the advancement of women as a business priority and create a comprehensive strategy to achieve it with the same diligence they apply to other top business priorities. As part of this action plan, to really move the dial, companies should work to create a culture of equality characterized by Bold Leadership, Comprehensive Action and an Empowering Environment. Once companies advance more women in leadership, they will improve their financial performance, drive innovation and help close the gender pay gap.

[1] Lean In, McKinsey & Company, “Women in the Workplace,” Women in the Workplace, https://womenintheworkplace.com/.
[2] Catalyst, “Quick Take: Women in the Workforce: Canada,” Catalyst, http://www.catalyst.org/knowledge/women-workforce-canada.
[3] Catalyst, “Women CEOs of the S&P 500,” Catalyst, https://www.catalyst.org/knowledge/women-ceos-sp-500.
[4] Vivian Hunt, Sara Prince, Sundiatu Dixon-Fyle, Lareina Yee. (2018). Delivering through Diversity. McKinsey & Company. https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Delivering%20through%20diversity/Delivering-through-diversity_full-report.ashx
[5] Rocio Lorenzo and Martin Reeves, “How and Where Diversity Drives Financial Performance,” Harvard Business Review, https://hbr.org/2018/01/how-and-where-diversity-drives-financial-performance
[6] Accenture, “Getting to Equal 2017: Closing the Gender Pay Gap,” Accenture, https://www.accenture.com/_acnmedia/PDF-45/Accenture-IWD-2017-Research-Getting-To-Equal.pdf

Date Posted: Oct, 2018