The presence of women in C-suites and boardrooms of the Canadian real estate industry appears even rarer than their already modest profile in the broader economy. An analysis of 62 companies reporting portfolios of at least 10 million square feet to Canadian Property Management‘s 2017 Who’s Who in Canadian Real Estate survey finds two female chief executive officers (CEOs), three chief operating officers (COOs) and 17 chief financial officers (CFOs).
Using each company’s own definition of its senior management team (as presented on its website) to tally the gender breakdown of ranking leadership, women fill 141 or about 22.5 per cent of 627 listed positions. The number of individuals recognized in each company varies from a low of two to a high of 36, but women are the cited majority in just one case — at Killam Properties/Apartment REIT. Meanwhile, 14 companies have no women highlighted in senior management roles.
In part, the gender imbalance in real estate’s hierarchy says more about the 20th century than this one, given that climbing the corporate ladder is typically a multi-decade undertaking.
“This is a long career supply pipeline and the mostly male CEOs and board members coming out at the end started their careers 30 to 40 years ago when the vast majority of real estate employees were male,” acknowledges Michael Brooks, CEO of REALPAC, the association that represents many of Canada’s leading real estate companies and institutional investors.
Yet, change management specialists caution that a homogeneous perspective among top decision-makers can be stifling in fluid times. Notably, 2015 and 2016 MSCI research on the correlation between women in leadership and financial performance found that companies with higher proportions of female executives and at least three women directors/trustees on their boards have achieved better return on equity and earnings per share than predominantly male bastions.
No direct causal link has been identified, but analysts hypothesize that diversity leads to better decision making. There is also evidence that companies moving toward gender parity suffer less employee turnover and enjoy higher levels of employee engagement, which tends to show up in economic performance.
“The commercial real estate industry has a very long way to go,” submits Sheila Botting, Canadian real estate leader and partner with Deloitte. “If we don’t reflect diversity in a more holistic and focused way, we won’t keep pace with the Canadian economy or the wider business community.”
Reinforcements for the future
Looking at those potentially positioned to move up or into senior management, there are 21 executive or senior vice presidents and 41 vice presidents among women identified on the 62 company websites. In addition to the CEOs, COOs and CFOs, six women fill other C-suite roles as chief counsel, chief human resources officer and chief marketing officer.
These numbers are expected to rise as the more balanced workforce of the 21st century gains seniority. “There are a lot more women coming in the front end of the pipeline who will be CEOs, CFOs and VPs in the near future, in addition to the ones who are there already,” Brooks predicts.
A little more than half, or 33 of the 62 companies have boards of directors or trustees. Here, women’s representation trails even further, numbering 50 or about 17 per cent of 292 board positions. Seven boards are all-male — in two cases, mirroring the company’s all-male executive leadership. Another 15 companies have just one woman director/trustee.
Canada’s recently released 2017-18 budget points to a slightly more generous share of leadership roles for women across the entire private sector, citing the 2016 figures at 26 per cent of senior management and 19.5 per cent of Financial Post 500 board members. Among 94 Canadian companies in the MSCI ACWI Index, data from the fall of 2016 pegs women’s board representation at 22.5 per cent, with 47 of those boards boasting at least three female members.
Eight of the 33 real estate companies have three or more female board members. The three boards with four or more women members are pension funds: HOOPP; Cadillac Fairview; and OMERS/Oxford Properties. That’s in keeping with other evidence that pension funds are typically more active advancers of environmental, social and governance (ESG) initiatives.
The Canadian government is promoting a target for women to comprise 30 per cent of board membership, nationwide, by 2019. With the 2014 introduction of what’s commonly dubbed comply-or-explain requirements through the Ontario Securities Commission, publicly traded companies must transparently report the gender composition of their boards — a tactic that essentially leverages shame, if, indeed, unit/shareholders feel and wield it, to inspire change.
“Good governance practice for boards typically involves a skills, diversity, gender and age matrix. They look for particular skills in key board committee areas — finance, investment, accounting, legal, banking, compensation, governance — and then look to fill those needs with an eye to diversity, gender and age,” Brooks explains. “Of course, there are women with all those skill sets today. You just have to find them.”
Glass ceiling over deal making
Real estate offers a multidisciplinary career path and women have experienced varying success in ascending the domains of property management, development, leasing and investment/asset management. By definition, Canadian Property Management‘s Who’s Who survey focuses primarily on the first function, which, Botting suggests, has traditionally been more open to women with legal and accounting expertise than the deal-making facets of the business.
“In my view, there is a glass ceiling for women in the commercial real estate industry,” she says. “Some of the obstacles are related to value systems.”
Fissures are appearing in the ceiling and spreading in a few directions. Finance/accounting is clearly the most frequented route to the C-suite, while residential management appears to offer more opportunities in general.
Seven of the 10 surveyed companies with the highest percentage of women in their senior ranks are primarily focused on residential management. One of the two women CEOs heads a residential management company, while two companies where women hold both the COO and CFO positions also provide mainly residential services.
“If we post an opening for a manager, typically 80 per cent of the replies we get are from women,” reports Raymond Wilson, President of Wilson Blanchard Management, who shares the C-suite with COO Karen Reynolds and CFO Paula Davis.
Wilson Blanchard offers a good example of mentoring, as both women were recruited and grew into senior roles in step with the company’s relatively rapid expansion to today’s 41-million square feet under management. Davis is an original employee who had worked elsewhere with Wilson and his partner, Dave Blanchard, prior to the 1995 launch of their company. Reynolds ran her own property management company and was a student in a course Wilson taught at Hamilton’s Mohawk College when he offered her a part-time position.
“That’s just been one of the best moves we’ve ever made as long as we’ve been in business,” Wilson affirms.
Diversity is the new sustainability
Women’s success in residential management ironically occurs in the real estate milieu least likely to fit neatly into an eight-hour, daytime workday. Studies consistently show that women shoulder a disproportionately greater share of family and household-related labour, and the childcare-intensive stage of their lives is often when their male peers outmanoeuvre them on the career track.
Technological advances, along with evolving attitudes about work-life balance and what constitutes a workplace, now provide more flexibility to work outside a formal office setting and/or stagger work hours around other responsibilities. “Twenty years ago, people didn’t have these opportunities and, today, these advantages are helping to recruit women and men alike,” Botting observes.
With the resources (a growing pool of women poised to move into leadership roles) and infrastructure (technology) in place, she sees proactive strategy as the next necessary piece. As an example, the industry’s somewhat meteoric acceptance of green building principles is proof that it can be open to, and profit from, new business practices and philosophies.
If sustainability is considered a must-have to appeal to the millennial sensibility and to attract and retain quality tenants, Botting argues it shouldn’t be a stretch to frame diversity the same way. “For the industry overall, it’s very much an opportunity,” she says.
Results of the 2017 Who’s Who in Canadian Real Estate survey will be published in the March/April print issue of Canadian Property Management.