Since the onset of the pandemic, the proportion of women being hired into CEO roles has declined, as companies focus on experience at the expense diversity, says Dominique Fortier, Regional Managing Partner at Heidrick & Struggles, a leading executive search firm. In 2019, 12% of new CEOs were women, but after the pandemic began that fell to 6%, she says.
“From their purpose to their workforce, as well as how they perform in the face of uncertainty, [companies] are changing … and people are resorting back to what is known and comfortable,” she says.
“While the proven track record is extremely important during periods of uncertainty, we know that broader diversity of experience, sustainability and purpose [are] critical to long-term survival and growth when the global business environment returns to some semblance of normal,” says Fortier, who leads the search firm’s CEO and Board Practice in Canada.
Photo: Dominique Fortier, Regional Managing Partner at Heidrick & Struggles
Fortier was taking part in a webcast with Jean-François Perrault, Chief Economist at Scotiabank, as part of the Bank’s She Said Summit on International Women’s Day. In a series of virtual sessions, Scotiabank employees had the opportunity to explore issues affecting women in the workplace, at home and as customers.
The executive hiring issue is just one of the ways the COVID-19 pandemic has impacted women, Perrault and Fortier agreed.
“The pandemic has really shone a spotlight on inequality from a gender perspective, a racialized perspective and a developmental one,” Perrault says.
A key challenge highlighted by both him and Fortier is the additional burden women around the world have suddenly faced as childcare centres and schools shut down. “Women have taken on an incredible burden,” Fortier says. “Working women with children still at home have faced enormous challenges due to lack of adequate childcare and the burdens of working and homeschooling,” she says.
Broader diversity of experience, sustainability and purpose [are] critical to long-term survival and growth when the global business environment returns to some semblance of normal.
Perrault believes governments need to address this situation as quickly as possible to ensure women’s participation in the labour force, skills development and wealth accumulation get back on track. “We know women are going to be out of the labour force longer than men as a result of this. A year or two delay in terms of access to the labour market and education relative to your male competitors is a big deal,” he says.
Having spent the best part of the past year looking at how the pandemic is affecting every aspect of the economy and people’s finances, Perrault says, he is surprised by the resilience women have demonstrated in the pandemic. Despite how deeply the pandemic has affected sectors where women are overwhelmingly represented — arts and entertainment, education, food and accommodation — he says that default rates and the financial performance of customers who have been affected by the pandemic, are far more resilient than expected.
Fortier says companies need to start looking at their pipeline of future leaders to ensure they are developing a deep and wide bench of diverse executives, including women, and providing the experiences and opportunities required for the top job.
One sector where women have been advancing is financial services, Fortier says, especially in terms of board representation, where banks have been leading. “The board at Scotiabank 30 years ago would look very different than it does today and that’s something we should be proud of,” she says.
While the sector has done a good job putting women in functional roles — legal, human resources, risk compliance, those types of things — Fortier says that there is more representation needed in Profit and Loss (P&L) ownership roles, which involve monitoring the net income after expenses for a department or the organization, with direct influence on how company resources are allocated.
At Scotiabank, 44% of executive appointments in 2020 went to women, and 43% of its Board of Directors are women. As well, for a fourth consecutive year, Scotiabank is on the Bloomberg Gender-Equality Index (GEI), a reference index recognizing companies committed to transparency in gender reporting and gender equality in the workforce.
“This very bad event is opening everybody’s eyes to the challenges and encouraging policymakers to run with it,” Perrault says, noting that within five years, in relation to participation in the economy, women might be in a better space then they would have, absent this crisis.