While talk about the importance of improving diversity on corporate boards and in the C-suite has been ongoing for decades, actual action has been too slow.
In 2020, there were more chief executive officers named Michael or James than actual women CEOs in the U.S., with just six per cent of the top 500 public companies having a female CEO, according to an analysis by Equileap. And the proportion of racialized individuals in corporate sector board roles was just 4.5 per cent in 2020, although racialized people represented 28.4 per cent of the population across eight Canadian cities studied in a report by Ryerson University’s Ted Rogers School of Management’s Diversity Institute (which I founded and of which I’m currently the academic director).
Increasing the representation of women and other diverse groups on boards and in the C-suite is linked to corporate performance, attracting and engaging diverse employees and increased innovation, as well as to risk reduction and brand protection. Diversity at the upper echelons of organizations also has a significant symbolic importance — signalling who belongs and who doesn’t — as well as challenging stereotypes and shaping aspirations. In addition to the growing evidence that more representative leadership has many benefits, it’s also a growing expectation of shareholders, as well as of consumers and regulators.
But barriers remain. Societal norms and stereotypes associate leadership with men. According to an influential paper published in 1996 titled “Think manager — think male: a global phenomenon?” in the Journal of Organizational Behavior, gendered stereotypes of leadership in the media can have a profound impact on how women are expected to behave in the workplace. In addition, similar stereotypes and cultural norms present barriers to the advancement of racialized and Indigenous peoples, those living with disabilities and those who identify as LGBTQ2S+.
National culture and legislative frameworks also play a role. While some countries — for example, those in Scandinavia or Iceland — have neared gender parity on boards, Canada is a global leader in setting standards beyond gender. Since 1986, Canada’s employment equity legislation has focused on designated groups that have been historically disadvantaged — women, racialized people, persons with disabilities and Indigenous peoples.
Canada again broke new ground when it passed Bill C-25, otherwise known as “comply or explain” legislation, requiring federally regulated companies to report on the representation of women and other designated groups. More recently, with the 50-30 Challenge, Canada has introduced a voluntary code that’s already signed by 1,500 organizations (including Ryerson’s diversity institute), which is aimed at advancing gender parity and increased representation of the other designated groups, as well as those identifying as LGBTQ2S+.
In the Canadian context, it’s clear that racialized people face more barriers than women. For example, in the city of Toronto, women make up about half of the workforce and racialized peoples are more than half. But the gaps in representation are much greater for racialized people in many sectors. In the corporate sector, white women outnumber racialized women 12 to one, according to a 2020 report by Ryerson’s diversity institute. The same report also showed the differences within the broad category of racialized peoples. As well, a recent report analyzed corporate board members in all of Canada and disaggregated the “racialized” category to specifically examine representation of Black board members. Of 1,600 corporate board positions in Canada, there were a total of nine Black men and four Black women.
Current levels of reported diversity on corporate boards and in senior management positions across companies subject to the new C-25 regulations highlight how far there’s still to go. Among the 529 companies that disclosed diversity in leadership, 33 per cent have no women CEOs and only five per cent have four or more women CEOs. Out of 270 companies disclosing diversity on boards, members of visible minorities, Indigenous peoples and people living with disabilities represent 5.5 per cent, 0.5 per cent and 0.4 per cent of board positions, respectively.
But the differences seen within sectors — for example, between corporations with more than 40 per cent women on boards or 20 per cent racialized people in leadership roles contrasted with those that have none — show clearly that the issue isn’t the pool, but the policies and processes these organizations adopt.
Organizations need to move beyond intentions to comprehensive strategies that clearly connect diversity, equity and inclusion to corporate priorities. The diversity institute identifies specific actions in six areas that organizations can take, including: leadership, strategy and governance; talent management; culture; metrics and measurement; the value chain (procurement, product design, marketing and service delivery and more); and partnership and building the pool.
Too many years have passed with too little progress. Employers need to move beyond good intentions to action, to measurable targets, transparency and accountability.