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Report on Business ‘Things are changing, but they have to change from the top:' CVCA reports slow progress in promotion of women, visible minorities

With women making up just 12 per cent of managing partners at Canadian private-equity and venture-capital firms, the industry still has “a lot of work to do” in developing the careers of women and visible minorities, according to the head of the Canadian Venture Capital & Private Equity Association.

Of the 36 member venture-capital firms that responded to the CVCA survey, only 11 per cent have female partners. Private-equity firms reported similar numbers, with women making up just 12 per cent of partners at the 23 firms surveyed. A 2017 Where’s the dial now? report by PwC Canada, #movethedial and MaRS found that 30 per cent of Canadian venture-capital firms had a female partner and, on average, 12 per cent of partners were women.

The CVCA’s State of Diversity & Inclusion report, co-commissioned with BDC Capital and released Thursday, compared these figures with the banking and legal industries, which also struggle to recruit and promote diverse employees, and found that private-equity and venture-capital firms lag far behind these sectors. More than a third of management positions at banks are held by women, and 25 per cent in the legal profession.

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“It’s a male-dominated sector and things are changing, but they have to change from the top,” said Kim Furlong, chief executive officer of the CVCA. “It’s about making the business case that diversity is good for the bottom line.”

The report depended on member firms responding to the survey request, and only a third participated. While Ms. Furlong said she was “satisfied” with the response rate since voluntary surveys typically solicit low response rates regardless of the topic, she added that private-equity and venture-capital firms do not often prioritize this issue.

“It’s an issue that, for some of our members, is not top of mind,” she said. “This report is meant to be a baseline and my gut tells me that when we go back to market in a few years, we’ll have a higher response rate because people will want to tell us what they’ve done.”

Some private-capital firms have more female pipeline talent in more junior levels. The report found that at eight out of 36 venture-capital firms, women make up more than half of the entry- and junior-level roles. But work policies need to change to help those women move up the ranks, said Whitney Rockley, the co-chair of the CVCA Diversity and Inclusion committee.

A large part of the issue is changing the perception around flexible work hours, a shift that would allow more women to compete for high-level roles, Ms. Rockley said. She said that the industry attracts highly competitive people with strong work ethic, but that women often are unable to work around-the-clock hours as their personal responsibilities increase around home and family.

“It’s very difficult to continue competing if you have other priorities on the personal front,” said Ms. Rockley, who is also the co-founder and managing partner of McRock Capital. “I’ve witnessed it a number of times in my career. If you’re not competing equally as hard, you’ll get relentlessly trumped.”

Several reports over the past few years have attempted to address the continuing diversity disparity at Canadian private-capital firms. The Move the Dial report found that, out of more than 900 Canadian tech firms, women account for just 5 per cent of chief executive roles and 13 per cent of executive team positions. More than half of tech companies have no female executives.

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The recent CVCA report found similar results in the representation of visible minorities. Only 8 per cent of partners at private-equity firms and 18 per cent of partners at VC firms were visible minorities.

Indigenous, LGBTQ+ and people with disabilities were also represented in low numbers, with the majority of firms reporting that none of their employees identify as members of these minority groups.

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