Canadian technology companies may be breaking new ground as innovators, but a landmark study published on Wednesday finds the sector is behind the times when it comes to finding a place for women in senior roles.
The survey of more than 900 Canadian tech firms found women account for just 5 per cent of CEO roles and 13 per cent of executive team positions, while more than half – 53 per cent – of tech companies have no female executives. On average, women account for 8 per cent of director roles, while 73 per cent of firms have no women on their boards.
Seventy per cent of Canadian venture capital firms that finance young tech firms have no female partners, while 12 per cent of all partners are women. The study was led by a new Toronto organization called #movethedial and co-authored with PwC Canada and MaRS Discovery District.
The data are little better among tech companies that have raised the most funds from venture capitalists or gone public. When the report’s authors narrowed their look, at The Globe and Mail’s request, to those companies that had raised $50-million or more in venture financing from 2010 to mid-2017– so-called “scale-ups” – none had a female CEO or founder, 30 per cent had no women senior executives and women accounted for just 6 per cent of director roles. Nearly two-thirds had no women on their boards.
Among the 20 publicly traded companies that make up the TSX Capped Information Technology index, there are no female CEOs, while women hold 8 per cent of executive team jobs and 12 per cent of board posts. Eight per cent have no female executive or board members.
By comparison, recent studies have found that 21 per cent of board seats on Canadian stock index companies and more than a third of senior management positions with the banks are held by women. “The statistics are dismal, there’s no way around that,” said Carol Leaman, CEO of Waterloo-based digital learning firm Axonify Inc. “Am I surprised? I can’t say I am.”
The report comes during a watershed year in which long-standing practices of sexual discrimination, harassment, assault and other forms of bad gender-biased behaviour have been outed – and punished. Revelations of toxic workplaces or allegations against abusers have led to the departures of senior figures in the technology, entertainment and media industries in the United States and Canada. It also led to the unprecedented #MeToo campaign in which countless women declared on social media that they had experienced the kind of alleged abuse that had toppled figures such as film producer Harvey Weinstein and Silicon Valley venture capitalist Dave McClure.
“I think the fact that Harvey [Weinstein] could be brought down in two weeks is one of the most significantly important things that I’ve seen in my career … and will have repercussions for all industries,” said Carol Bartz, former CEO of U.S. tech giants Autodesk Inc. and Yahoo. In some ways it is surprising that the nimble and change-embracing tech sector has been so impervious to the gender-balancing evolution that has been more common in such fields as financial services, medicine and law.
“In a sector that should be leap-frogging all others in gender inclusion, it is shocking that 73 per cent and 53 per cent, respectively, of Canadian tech companies have zero women on their board and executive teams, which constitutes an unconscionable lag as compared to the rest of the Canadian market,” said Tanya van Biesen, executive director of the Canadian arm of Catalyst, a global non-profit that advocates for better female representation in the corporate world. “Canadian tech companies will only thrive if they have the best and brightest talent, so they should be doing everything they can to position themselves as magnets across the broadest possible pools of people – men and women.”
Several damning studies have pointed to a distinctive and troubling anti-female bias in the tech sector, despite several other reports that show female-led tech companies have posted better returns than those with no female senior leaders.
For example, a 2016 Catalyst report found Fortune 500 companies with highest percentage of women directors outperformed those with the fewest by at least 53 per cent; companies with more representation of women in management experience 35 per cent better return on equity, according to a Catalyst study of companies in late 90s; and a study by San Francisco-based seed-stage venture firm First Round Capital found companies with a female founder performed 63 per cent better than the firm’s investments with all-male founding teams.
Some blame a Silicon Valley culture that has rewarded what technology journalist Sarah Lacy, author of the upcoming A Uterus is a Feature, Not a Bug, has described as “toxic masculinity” in which many tech leaders have little interest in the diversity issue.
“What’s interesting is, this is supposed to be a data-driven industry,” Ms. Lacy said in an interview. “There’s tons of data showing that … women make better entrepreneurs, women make better investors [and that] gender and racial inclusion makes for stronger teams. There is no shortage of data … And this data-driven industry continues to ignore the data, and inclusion has gotten worse,” including a decline in the share of women-led tech firms that received venture financing since the dot-com boom.
Industry participants say it is vitally important to ensure the tech sector catches up, because it has been a source of substantial economic growth and job creation globally. With Canada facing a shortage of engineering talent in the coming years and cutting edge technology increasingly invading all sectors, “It’s not okay for half the talent pool to be on the sides because we need them in order to compete globally and drive our GDP,” Ms. Kovitz said. In response, there has been a proliferation of new organizations to help women succeed as tech entrepreneurs, executives, engineers, directors and investors, such as SheEO, The Big Push, Go Sponsor Her, The Raise Collective and Women’s Equity Lab (WEL), a Victoria-based project to help 20 local women invest in startups. “There’s almost no women investing in these companies,” WEL co-founder Stephanie Andrew said. Data from #movethedial also shows firms with female directors or CEOs are likelier to have more women on their executive teams than those that don’t.
“Women need to see role models and they’re asking for it, especially women getting into the tech space,” said Michelle Scarborough, who is overseeing a new $50-million government fund to invest in women-led tech businesses for Business Development Bank of Canada.
At the same time, successful women tech leaders say they want to be promoted on their merits and track record, not because of their gender. Many warn of tokenism, whereby firms feel they can get off the hook by hiring a single senior female. Angela Tran Kingyens, one of two partners in Vancouver-based venture capital firm Version One Ventures, said “I can’t tell you how many times recruiters have reached out” but they’re looking specifically for a woman “which is such a turnoff. It’s almost a slap in the face when someone comes to you and says ‘We’d love to have a female general partner’ versus ‘Hey, we really like the way you think around your thesis on network effects.'”
“One female partner isn’t going to change much, just as one female board member doesn’t really change much,” Ms. Bartz said. “You have to have at least two. Until you start seeing multiple females in these roles, there’s not a change.”
Tech industry players say institutional investors must push venture capitalists they back to in turn ensure the young companies they finance are embracing diversity in their culture and hiring practices at an earlier stage.
Meanwhile, some male Canadian tech leaders, including Ceridian CEO David Ossip and Montreal venture capitalist Helge Seetzen, say the key is for senior leaders to set a tone and ensure female executives are being as equally groomed for promotions to senior jobs as men. “We’re probably half way to where we need to be” in terms of female representation in Ceridian’s senior ranks, Mr. Ossip said. But as jobs turn over, “you’ll typically end up within a few years with an organization that has the right representation.”
Editor’s Note The spelling of Helge Seetzen’s last name has been corrected in the online version of this story.
The Globe and Mail, November 1, 2017