November 12, 2020
By Shilpa Tiwari, Corporate Knights
Conversations about the need for a more diverse and inclusive corporate Canada are not new. But recent anti-racism protests have placed the corporate realm under increased scrutiny. Companies face mounting pressure to address systemic racism by diversifying their boards, but does doing so ensure that representation filters down to the executive level, and ultimately create an inclusive corporate culture?
A significant body of research has made clear the correlation between a diverse senior management team and improved company performance. McKinsey’s latest diversity study, released this spring, found that companies in the top quartile for ethnic diversity were 36% more profitable than those in the bottom quartile. A 2018 Deloitte report found that inclusive companies also outperform on customer satisfaction (+39%), productivity (+22%) and turnover (-22%). Regardless of the evidence, however, moving the dial on corporate diversity, equity and inclusion is complicated and slow going.
Corporate Knights analysis of 68 Toronto Stock Exchange companies with at least $1 billion in annual revenue found that just eight had at least 10% racial diversity on both their boards and senior executive teams, including Canadian Solar Inc., BlackBerry Limited and Toronto-Dominion Bank (see table below for the top 10). More than a third (37%) of large publicly traded companies in Canada did not have a single racially diverse board member or senior executive. It’s a startling figure, considering that 27% of Canada’s population is racially diverse, with 5% of that being Indigenous.
A number of companies are scrambling to address racial inequities by hiring a chief diversity officer (CDO) or diversity and inclusion (D&I) manager. But between the politics, bureaucracy, fiefdoms and silos, one CDO or D&I manager – with little to no budget, limited staff and a reporting line that is levels down from the CEO – is hardly going to be heard, let alone redesign a system to change ingrained beliefs and power structures.
The ways in which systemic racism and bias are deeply rooted within corporations are not always easily identified or understood. In addition to Black, Indigenous and people of colour (BIPOC) being passed over for promotions more often and hired at levels far lower than their qualifications, in recent months racialized Canadians have publicly shared their experiences of microaggression in the workplace. I myself have had a C-suite executive assume that I had completed my doctorate degree at an Indian university, even though I’m Canadian. I was also told, by the same female executive, that there are not enough qualified women of colour. Meanwhile, there are more racialized professional women in Toronto than non-racialized professional women, yet non-racialized women still outnumber racialized women in corporate leadership roles 12 to 1, according to Ryerson University’s 2020 Diversity Institute study, Diversity Leads.