The challenge with going second is that Kate took most of my good material. That's fine. I have a couple of good jokes left.
Thank you so much for the opportunity to present today. My flight was delayed. I made it just in the nick of time, so I'm grateful for that.
For those of you who aren't familiar with Catalyst, we are a global organization. We work with businesses around the world to support them in creating diverse and inclusive workplaces and in fully leveraging their talent.
We've been around for over 50 years, and we try to produce a really strong body of research to drive and shape the conversation around women's advancement globally. More important, we take that research and we turn it into very practical tools and resources for business leaders and companies to make change.
I am delighted to contribute to the important work you're doing, looking at systemic barriers to women's advancement. I think this is a timely and important conversation because of the importance of talent to Canada's economic competitiveness, but I also think the bigger question for this group is the fact that we're still having this conversation and it still really matters.
In my view, this conversation really is about Canada's economic competitiveness and our talent. As you well know, Canada, like many countries around the world, is facing a labour shortage, with aging baby boomers who will move out of the workforce, with slower population growth—although I'm doing my part; I had three children in 12 months; I'm trying to increase the stats—and with an increasingly competitive global marketplace.
Our talent gives us a competitive advantage because we have a highly skilled workforce. Kate touched on this. We put more people through post-secondary education than almost any country in the world. We need to capitalize on that talent, but we do not. We are now falling behind—and you know this—at least insofar as we can start tracking progress for women on boards, which is one example but an important example. We're falling behind comparator countries such as the United Kingdom, Australia, and much of Europe. That is something that I think is driving a very different conversation in this country today.
When we look at the numbers and the pyramid we put together as an organization, it's typically focused on FP 500 companies, our largest Canadian corporations. Roughly 50% of the entry level workforce in those companies is women, and 36% of management positions, 16% of board positions, and 18% of senior officer positions are occupied by women.
Common wisdom—and you hear this often—suggests that women's choices are responsible for the lack of progress through the ranks. We frequently hear the following. Women have babies. We take time off to care for our babies. We often take on additional caregiving responsibilities in the broader family. We may be less ambitious because we want a different quality of life. We make different choices. The evidence does not support those as the key reasons why progress through the ranks is so slow.
What is the evidence telling us? The evidence is telling us, in a nutshell, that this is not a glass ceiling. Women are not entering as 50% and then moving up to management consistently through the ranks and then all of a sudden hitting a barrier. Increasingly we are saying it's a sticky floor. When we are looking at men and women with similar skills, similar education, similar experience, similar aspirations, using similar strategies to get ahead, we see that the differences emerge immediately and they grow with time.
I have brought a table today as a piece of information for you that I think might be useful: a Canada-specific report that we put out last December. It's part of a global long-term research project we're doing, tracking MBA grads, men and women. We chose MBA grads because they cut across sectors. What we're finding is that right out of the gate there's a compensation gap. Globally the compensation gap is $4,200. In Canada it's $8,200.
The question I always get when I table that is, “Isn't that just men going into investment banking and women going into marketing?” No. That is men and women going into similar jobs and similar fields. The compensation gap starts early and grows with time.
There are differences in sponsorship. Men are typically benefiting from mentors who become sponsors who are more senior in an organization and better positioned to create opportunities for those individuals. Most importantly we are finding differences in the critical work experiences that men and women are getting right out of the gate, to advance. Men are benefiting from files and projects with bigger budgets, more direct reports, significantly more exposure to senior executives. That is what the evidence is telling us is directly attributable to different progress through the ranks. My hope is that we can move the conversation away from so much focus on the individual and onto the organization and some of the things we need to be doing as leaders to really drive that into organizations across this country.
Where are we now? Systemic challenges continue to undermine equal opportunities and women's ability to advance into leadership roles. At the risk of boring you with numbers, I've brought two additional pieces of information that I think will be useful for you, two short summaries of our census data.
One year we put out a census tracking progress for women on boards. One year we put out a census tracking progress for women in executive officer positions. There's a tonne of detail behind that. I've just brought the short summaries today. But when we are looking at progress through the ranks, if you want to put the numbers in context, what I always say to people is that if we felt that today 25% for boards and 25% for executive committees was the sweet spot, we are on track for it to take 15 years to get there for executive committees and 20 years for boards. So if nothing going forward changes, with the current rate of progress year over year it will take 15 and 20 years to get to a quarter. That feels shocking to me and typically when I put it in that context people say that does not feel right.
I think increasingly international and domestic pressure is starting to drive this conversation into boardrooms and executive committees across the country, which is a real positive. We are seeing in the census data, for the first time ever, the numbers are just starting to move. I always joked that when I saw the data last year for boards and I knew I had to be a public spokesperson around it, I said to my colleagues, I'm going to have to drink a carton of Red Bull to go out there and speak enthusiastically about these numbers, because there's nothing in here that is a positive message and nobody wants to just talk about negativity.
Where are we headed? I'm extremely hopeful about where we're headed. I don't think that's naive, I think it's based on the fact that more business leaders are speaking about these issues publicly and passionately. More importantly, they are being challenged on these issues more regularly. I do believe the Ontario Securities Commission's proposed comply or explain regulations will have a significant impact. I believe they're already having an impact. I give them huge credit for moving forward with this. But I give credit to people in this room and others who have been driving this conversation for a very long time and trying to get it on the radar of leaders.
Australia is a wonderful comparator jurisdiction, and I would have brought a chart that we prepared comparing where Australia was four years ago to where Canada is today, but I just didn't have time to get it translated so I think I'll submit it later on. But we looked at where Australia was in 2010 when they just started to talk about comply or explain—and again boards are just an indicator—but the numbers started to move. They implemented comply or explain and there was a 7% increase in three years in their board numbers. They absolutely took off. What you're seeing is that seat turnover now is increasingly being filled by women. That to me is where we're headed. Again, boards are one example, but a very important, significant step in this country.
Two years ago, Catalyst challenged all FP 500 companies to commit to an initiative we moved forward, the Catalyst accord. We've asked companies to set a goal and a target for women's board representation and I think increasingly the focus, rightly so, is on boards and executive committees to help lift the FP average to 25%. So if you're at 0%, don't worry about getting to 40%. Get to 15%, get to 20%. Start to focus on what is realistic for you, but help lift the average to 25% by 2017. So far 26 companies have made the commitment and more and more companies are contacting us every month and bringing the information to their board and having the conversation, which I think is a real positive.
Again, to put this in context, to get to 25% would require every FP 500 company to add one more woman to their board, so 90 more women a year for the next five years. That is out of 4,200 board seats. You cannot tell me there is a dearth of women who are qualified to take those 90 spots. We simply need to increase demand. Supply is well in hand.
If I could ask one thing of you as influential leaders looking to understand or remove systemic barriers getting in the way of women's advancement, it would be to challenge Canadian business leaders to do just this: to set targets, to set goals around women's representation, to develop the strategies to help them get there. Our experience with the accord is that as soon as a company has this conversation, there's no turning back. Out of the probably 40 or 45 companies who have contacted us so far about the accord, only one company has taken the issue to their board and come back and said they won't sign the accord. Typically what we're seeing is that companies have the conversation at the board level and the changes are immediate. They're not necessarily dramatic, but you see over two or three years something very significant start to change in that organization.
I'd also ask you to challenge leaders to align their business and their people strategies and really connect those two things very powerfully together. This really is about creating inclusive workplaces where men and women can fully contribute and we fully leverage our talent.
You know that leveraging our talent is too important for economic competitiveness not to get it right. I think we're on the right road, but there's a lot more work to do.
I'm delighted to be here today. I'm pleased to support you in any way I can. The one thing I would flag is that most of our research is publicly available. To the extent that it can be useful, I'm a resource, and the website is www.catalyst.org. I think you'll probably find a number of things there that will support your conversation.