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Part 1: Why the executive suite is the final frontier for women Add to ...

It was at a small Toronto conference in the spring of 2004 that Phyllis Yaffe decided she was mad as hell and wasn't going to take the old boys network anymore.

Ms. Yaffe, then chief operating officer of Alliance Atlantis Communications Inc., was listening to a panel of businessmen, including veteran legal advisor Purdy Crawford, chief executive officers John Cassaday of Corus Entertainment Inc. and John McLennan of MTS Allstream Inc., bemoan the lack of qualified women candidates for corporate boards.

The kick in the skirt for Ms. Yaffe was that many of the women surrounding her in the audience were seasoned female executives.

"I was so fed up being told there were no capable women. I had to stand up and tell them that I thought they were stupid," she remembers. "I used every bad word I could think of. I was so angry at all of it. I couldn't stand the patronizing and obnoxious way they were talking to us."

Neither, apparently, could the several dozen women in the audience, who greeted her outburst with loud and sustained applause.

Ms. Yaffe's career was unscathed by her tirade. Within a year she was promoted to chief executive officer of Alliance Atlantis, and today the 62-year-old is a director on the boards of Cineplex Entertainment, Lions Gate Entertainment, Torstar Corp. and Ryerson University.

But for most of the women at the conference that day, and for thousands of female professionals who aspire to the upper reaches of Canadian business and politics, little has changed.

The number of women occupying senior management positions in the country's biggest companies has barely budged in the past decade. Only 17 per cent of corporate officers and 13 per cent of directors at Canada's top 500 private and public sector companies are female. The slim showing represents an anemic gain of 2.8 per cent since 2002, when Catalyst Inc., a business women's lobbying group, first began tracking the numbers.

The picture isn't any brighter in Canada's political arena. Only 22 per cent of the country's elected members of parliament are women. That puts Canada in 51st place, behind Rwanda, Pakistan and Belarus, according to a global ranking of female political representation.

Women have complained about barriers to the top ever since universities and business schools began churning out large numbers of female graduates with specialized degrees in the early 1980s. Today, however, the disconnect between the traditional male-packed boardroom and the modern workplace is greater than ever.

Women account for 47 per cent of Canada's workforce, and 37 per cent of mid-level managers in the top 500 companies. Their presence is expected to grow even larger as women make up a growing majority of university graduates.

For all this progress, the majority of successful female professionals appear stuck in a kind of middle-management purgatory. No female has ever been handed the reins at one the country's the top banks despite the fact that nearly two thirds of employees are women. Toronto Dominion Bank President and chief executive officer Ed Clark, who has made promoting women a priority, says a female will run a bank "for sure." His timetable, however, is sometime "in the next 20 years."

Women are so rare in the oil patch that the only female heading a major integrated oil and gas company, Lorraine Mitchelmore , president of the Canadian arm of Netherlands-based Royal Dutch Shell PLC, is listed as Mr. Mitchelmore on a Bloomberg Businessweek data base. A female CEO has yet to be appointed at major Canadian-owned investment, mining, forestry or accounting firms. With only a very few exceptions, Canada's national law firms have always been steered by men.

Compared with our largest trading partner, Canada is a laggard when it comes to promoting female executives. In the United States, 32 of the top 1000 companies are run by women. These companies have average revenues of $17-billion and include such global powerhouses as Archer Daniels Midland Co., Kraft Foods Inc., Sunoco Inc. and PepsiCo Inc.

In Canada, 21 of the top 1,000 public companies have female CEOs. But many of these chiefs are related to founders and nearly half preside over tiny businesses with annual revenues of less than $25-million.

"I'm appalled that after all these years there has been such little progress," says Sheelagh Whittaker, one of the first women to be named a CEO of a Canadian public company when she took the helm at Canadian Satellite Communications Inc. That was in 1989.

Ms. Whittaker, now based in London, England as a director of Standard Life PLC and Imperial Oil Ltd., shares the belief of many female leaders that there is a lingering "bias" by male-dominated boards to promote leaders in their own image. With so few female CEOs, many directors still appear to view female candidates as a risky proposition.

"Why don't more organizations see that women are great leaders?" asks Michael MacMillan, a founder and former chairman of Alliance Atlantis who promoted Ms. Yaffe to as CEO. "We're a cautious crowd in Canada."

Others blame a lack of ambition by women to fight their way to the top rungs. Some point to ineffectual mentoring, inflexible work hours, or rigid career hierarchies as obstacles.

Whatever the reason, the lack of diversity in senior ranks is more than a women's issue. It is a corporate challenge.

As Corporate Canada stakes more of its economic future on global expansion, businesses are increasingly bumping into competitors who view executive diversity as an advantage.

For a number of U.S. firms, such as Dun & Bradstreet Corp. and Yahoo Inc., newly appointed female chief executives are seen as change agents who can reinvent companies buffeted by rapid technological or market changes. Britain's staid mining giant Anglo American PLC tapped a little-known Montreal-based mining executive to be its first female chief in 2007 because it wanted to shake up a lethargic conglomerate.

Canadian companies that continue to present uniformly white male faces in the executive suite run the risk of alienating potential customers, business partners and prized recruits.

"When I walk into a room, and I don't care if it is as a customer or quite frankly as CEO of a company, if I am sitting in a conference room with 12 people that do not reflect diversity, I am really uncomfortable and really kind of wonder about what kind of company I am dealing with," says Anne Mulcahy, retired chair of Xerox Corp.

Elyse Allan, chief executive officer of General Electric Canada, says it is "extremely problematic" that a trading nation such as Canada has so many corporate boards that lack the diverse perspectives and management styles that women bring to the upper reaches of business.

"If your board is still reflective of what your company looked like 20 years ago, that to me would be very frightening in terms of the ability of that company's strategy to be forward thinking," she says.

Some of Canada's more globally-minded companies have been pushing the advancement of women for years, but progress is slow.

"The world has to change," says TD Bank's Mr. Clark, who attributes the glacial pace to a combination of lingering sexism and the choices some female executives make to slow or stall their careers when raising children. Women account for 66 per cent of the TD Bank's employees, but it has taken 14 years of informal targets and programs at the bank to increase the number of female senior executives to 34 per cent from 8 per cent in 2008.

Even though he predicts it will be many more years before a woman leads a bank, he says companies that fail to promote women to senior jobs "are dead in the water in Canada" because they will lose the ability to attract or keep talented professionals. "You're out of business. Get over it."

While female talent is still scarce at the top of most major Canadian companies, a growing number of experienced executives are finding success by leaping off the traditional corporate ladder.

The largest Canadian-owned company with a female boss is Desjardins Group, which appointed Monique Leroux as chair and chief executive officer in 2008. Ms. Leroux got to the top through a uniquely democratic selection process. Unlike most companies who hand the job of hiring a CEO to clubby, male-dominated boards of directors, leadership candidates at Montreal-based Desjardins are elected by its 480 member caisses populaires.

Ms. Leroux, a mother and an accountant who rose through the ranks at Ernst & Young and Royal Bank of Canada, won a majority of votes against several candidates. "I think that if there would have been typical nomination with a board . . . I'm not sure that I would have been nominated," she says.

Other female business chiefs attribute their success to progressive employers at crown or foreign companies that are either more proactive about promoting women or view female leaders as promising catalysts for change.

When Anglo American's board went looking in 2007 for a new CEO to improve results and an abysmal safety record, it chose Cynthia Carroll, a low-profile mining executive with 18 years of experience at Montreal-based Alcan Inc. Investors and mining analysts were so stunned by the appointment of such an unknown talent that Anglo's stock plunged by 30 per cent and experts warned the new boss would not last.

Three years later, Ms. Carroll has restructured the company's debt, overhauled accident- prone mines and rebuffed a hostile takeover bid. The mother of four is ranked by several media organizations as the world's most powerful female.

Other global giants are swooping in to hire Canadian women to run their head offices or Canadian subsidiaries. Some of the world's largest resources companies, including Rio Tinto and Shell Canada, recently promoted Canadian executives to run their Canadian units. They preside over divisions with estimated annual revenues of more than $20-billion, dwarfing the top Canadian businesses run by women.

Other Canadian subsidiaries, such as American Express Canada and spice maker McCormick Canada Inc., have promoted their former Canadian chiefs to run bigger operations in the United States.

"Canada has a huge talent base," says Xerox's Anne Mulcahy. "It really is a bad situation when you develop some talent and then other people do appreciate and value that talent and promote so that there is no consistent pipeline [to]replace those women."

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