Leaders in gender equity, banks still far from equality

While women make up over half the workforce at Canada’s big banks, they are scarcer at the executive level and still face a significant pay gap compared with their male colleagues, according to a new report from DBRS Morningstar.

The big banks do better than most industries when it comes to employing women and stacking their boards of directors, but even they are still far from gender equality.

According to the rating agency’s report, the Big Six banks’ workforces are well over 50% female. Yet, this share drops to 38% at the vice-president level and above, and to 32% at the executive level.

That’s better than the average public company in Canada — only 22% of executives are women for companies listed on the TSX index, the report said.

The banks are also well ahead the rest of corporate Canada when it comes to gender equity on the board. DBRS said that 43% of board seats are currently held by women at the big banks, compared with just 23% for TSX companies generally.

“However, not one of these banks has a female chief executive officer, unlike some regional banks and credit unions that have had women at the helm of their institutions for several years,” the report noted.

Moreover, there remains a significant disparity in pay for men and women at the big banks.

DBRS estimates that women currently receive about 19% less than men in average hourly pay.

Canadian banks are also lagging most of their European and Australian counterparts when it comes to pay equity, the report said.

Federal legislation took effect in 2021 that should help close that gap, the report noted, by requiring federally regulated employers (including the banks) to analyze their existing compensation practices and develop plans to ensure they are providing equal pay for work of equal value by September 2024.

“This may help to gradually bridge the pay gap,” the report said.

The new reporting requirements may also help improve disclosure in this area, it suggested, noting that “there still is a lack of uniformity” in the banks’ disclosures.

“Pay equity reporting will add an additional layer of complexity and, although more transparency is better than none, it will be a while before investors can make a true apples-to-apples comparison on many factors regarding gender equity and diversity,” it said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.