Canada tops list for most female corporate leaders: report

Companies with better financial performance have one thing in common: more women in leadership roles, according to a new study.

“Gender diversity pays off,” says the Global Leadership Forecast 2014/2015 report from Pittsburgh-based human resources consulting firm DDI, which also found Canada has the highest number of female executives among companies studied.

The report is the latest to show a link between corporate health and a higher count of female executives.

The DDI report, written with The Conference Board in the U.S., says among companies that rank in the top 20 per cent based on financial performance, 37 per cent are women, including 12 per cent that are considered “high potential” women.

That compares to companies that rank in the bottom 20 per cent of financial performance, where 19 per cent are women, and 8 per cent are considered “high potential.”

A question of confidence?

While the study found no difference in leadership skills between men and women, it says women were underrepresented in part because of lack of confidence, compared to men.

“Men considered themselves more effective as leaders,” the report states. “This self-confidence is reflected in how highly they rated their leadership skills and ability to tackle management and business challenges. Women, on the other hand, were less likely to rate themselves as highly effective leaders compared to their peers.”

Women are also less likely to take on international assignments; lead across geographies or countries, or lead geographically dispersed teams, which the report describes as “a big opportunity gap.”

“Missing out in these key developmental opportunities makes a difference,” the report states. “Encouraging gender diversity in your leadership pool means greater diversity of thought, which, in turn, leads to improved problem solving and greater business benefits.”

The report follows recent findings out of the University of British Columbia, which show women executives are better at protecting shareholder value.

UBC Sauder School of Business professor Kai Li released a study last fall saying women aren’t as driven by corporate mergers and acquisitions (M&A) as men, which led to lower costs for corporations.

Li found that costs drop by 15.4 per cent for every female director on the board making the M&A decision. The study also found that every extra female director on the board reduces the number of a company’s attempted takeover bids by 7.6 per cent.

“Female board members play a significant role in mitigating the empire-building tendency of CEOs through the acquisition of other companies.” stated Li, who co-authored the study.

In the DDI report, which included 13,000 leaders in 2,000 companies across 48 countries, Canada ranked No. 1 for having the most female leaders – or 50 per cent of companies from the country surveyed. The U.S. and the Philippines tied for second at 41 per cent, while Thailand was third, confirmed a DDI spokesperson. Japan had the lowest rates of female leaders, at just 8 per cent of companies from that country surveyed.

In June, a Canadian government advisory council released a report called, “Good for Business: A Plan to Promote More Women on Canadian Boards,” which includes a plan to increase female representation on public and private boards.

It recommends Canadian companies boost the number of women on their boards to 30 per cent within five years, which is about double the current level, to help “strengthen the Canadian economy.”

The plan is to reach that target without any new regulatory requirements or quotas.