Indholdsfortegnelse for Fall 2017 i Rotman Management

In your time as CEO of TD Bank [2002-2014], you became known for embracing LGBTQ+ issues. Describe how and why you became involved. First, I’ll segue a bit and go back to my eldest son’s wedding a few years ago. As is the custom, he stood up to give a toast, to thank everyone for being there. He proceeded to go on and on about his mother, and all the things he had learned from her; then, he turned to me said, “My dad? Not so much.” Once the laughter subsided, he paused and said: “I actually did get one really important lesson from my father: Do the right thing.” That simple concept has been a core belief and motivator for me throughout my career. And let’s face it, working…

TODAY’S URBAN CRISIS is not the first we have faced, but it bears little resemblance to its predecessor. The crisis of the 1960s and 70s was defined by the economic abandonment of U.S. cities. Shaped by deindustrialization and ‘white flight’, many cities lost their core industries and became sites of growing and persistent poverty. Housing decayed; crime and violence increased; and social problems escalated — many of which remain with us to this day. What I see as ‘the New Urban Crisis’ is more all-encompassing. Although two of its core features — mounting inequality and rising housing prices — are most often discussed in relation to urban centres such as New York, London and Toronto, the crisis also hits hard at small and mid-sized cities, and its other core features…

BEATRIX DART: The 30% Club started out in the UK in 2010. What made you want to be a part of it here in Canada? VICTOR DODIG: It was actually you who called me and said, ‘Victor, what they are doing in the UK would be great for Canada; but we need some profile for it: Would you be willing to sign on as Chair?’ And I said, absolutely. A month after I started at CIBC, we had a big kick-off on International Women’s Day. The team from the UK came over to share their learnings to date, and from that point on, we have done things in our own Canadian way. Talk a bit about how you tweaked the Club’s mandate to reflect the Canadian environment. The focus in…

IN MANY ORGANIZATIONS TODAY, employees are expected to be wholly devoted to their work, such that they attend to their jobs ahead of all else, including family, personal needs — and even their health. These expectations are personified by the image of the ‘ideal worker’, which defines the most desirable workers as those who are totally committed to and always available for their work. Embracing this image is richly rewarded — particularly in professional and managerial jobs. Scholars have long focused on the difficulties that women experience with these expectations, but my research suggests that men also find these expectations challenging. People of both genders are facing a conflict between employer expectations and the type of worker that they prefer to be. I recently set out to examine how people…

1. Aggregate demand factors. When aggregate demand (or GDP) grows, employment and labour-force participation also increase, enabling incomes to rise. Conversely, lower labourforce participation rates, rising unemployment, and waning productivity (output per worker) can all lead to stagnating or falling incomes. Unemployment in particular can have a dampening effect on household income. 2. Demographic factors. These capture changes in the number of working-age people in each household. This number has fallen in several of our focus countries because of the shrinking size of households, the result of changing family structures, lower fertility rates and aging, which decreases the number of people available to work. 3. Labour-market factors. These include the evolving pattern in labour demand and supply. This is manifested in the wage share of GDP and the median household’s…

‘The American Dream’ means different things to different people. Professor Raj Chetty, who heads up Stanford University’s Equality of Opportunity Project, distills it into a simple statistic: The probability that a child born to parents in the bottom-fifth of the income distribution will make the leap to the top fifth — the classic notion of ‘rags-to-riches’. Today, according to Prof. Chetty, a child is more likely to attain the American Dream if she lives in Canada or Sweden. Based on the most recent data, in the U.S., a child has a 7.5% chance of moving from the bottom quintile to the top compared to 9% in the United Kingdom, 11.7% in Denmark, 12% in Sweden and 13.5% in Canada. Prof. Chetty and his research team, led by Harvard Professor Nathaniel…

As late as 1970, only five per cent of musicians performing in the top five U.S. orchestras were women. Today, women compose more than 35 per cent of the most acclaimed orchestras. This did not happen by chance. Rather, it required the introduction of ‘blind auditions’. The Boston Symphony Orchestra was the first to ask musicians to audition behind a screen, and in the 1970s and 80s, most other major orchestras followed suit. When they did so, usually in preliminary rounds, it raised the likelihood that a female musician would advance by 50 per cent and substantially increased the proportion of women hired. To make this change, no great technological feat was required—just awareness, a curtain and an innovative decision. More precisely, a design decision: A simple curtain doubled the…

Describe the difference between wealth inequality and income inequality. It’s useful to think about three types of inequality: Wealth inequality, income inequality and consumption inequality. Wealth inequality can be simply defined as ‘differences in the total amount of marketable assets that people possess’. Your wealth is calculated as the total amount of money that you would receive if you sold all your assets — your house, car, financial assets, etc. It does not include ‘accrued assets’, such as pension rights, because they cannot be sold. On the other hand, when we talk about income inequality, we generally mean differences in disposable income — that is, aftertax income. The key difference between income and consumption measures is that lots people can have zero income over a particular period, but your consumption…

How do you define ‘Womenomics’? We think of it as a lens on how the growing economic power of women is fundamentally changing our world. The metrics of Womenomics range from the growing number of female entrepreneurs to women’s growing purchasing power. Without this lens, people — and investors in particular — can easily miss how quickly things are changing. Describe what it means to invest with a ‘gender lens’. Those of us who have been immersed in developing the practice of ‘gender lens investing’ chose the term because it encompasses biology and culture, and it invites analysis that is inclusive of men and women. We wanted to broaden the conversation from ‘investing in women’ (i.e. womenled or owned businesses) to looking at all types of investment opportunities and how…

Describe the current state of ‘women on boards of directors’. The average proportion of women directors on the boards of S&P 1500 firms has steadily increased, from seven per cent in 1998 to 16 per cent in 2015. Nevertheless, women are still significantly underrepresented in corporate boards, given that 47 per cent of the U.S. workforce consists of women. As of 2015, about 17 per cent of S&P 1500 boards still had no women directors and 35 per cent had only one. A number of OECD countries are addressing this issue through various forms of regulations. Some countries have either mandated or established voluntary quotas for corporate boards; others, including Canada, require disclosure explaining the reason for the lack of gender diversity. These efforts are based on an argument that…

rotmanmagazine.ca / 7 MOST READERS PROBABLY REMEMBER that moment when newlyelected Prime Minister Justin Trudeau was asked by a reporter, why he had appointed women to 50 per cent of his cabinet positions — and his now-famous response: “Because it’s 2015.” What is remarkable to me about that moment is not the Prime Minister’s appropriately-feminist response — although that was a welcome surprise; but the fact that the question had to be asked at all. How did we get all the way to the 21st century, and this is still a question? How are people still wondering whether women should have equal positions of leadership in politics, business — or anywhere else in the world? If I think back to my own career, it has been 30 years since I…

WHILE INCOME INEQUALITY between countries has declined significantly over the past 20 years, it has grown markedly within countries. A combination of accelerating technological change, global integration, domestic deregulation and immigration has been driving major changes in labour markets in most advanced countries. This has resulted in heightened dislocation, pressure on median wages and insecurity — even though these countries have enhanced efficiency and overall national income. At the same time, many developing countries have had difficulty diffusing the benefits of rapid growth and industrialization widely enough to satisfy rising social expectations. The result: In rich and poor countries alike, social inclusion is a burning political issue. The dawning Fourth Industrial Revolution appears likely to accelerate the forces of dispersion. Advanced technologies are being applied and combined in ways that…

UP UNTIL NOW, diversity initiatives have focused primarily on fairness for legally-protected populations. But the smartest organizations are embracing and harnessing a more powerful and nuanced type of diversity: Diversity of thought. Advances in neuroscience mean that matching people to specific jobs based on more rigorous cognitive analysis is now within reach. Organizations that can operationalize faster ideation can begin to purposely align individuals to certain teams and jobs simply because of the way they think. As we will demonstrate, diversity of thought brings an organization three key benefits: It helps guard against groupthink and expert overconfidence; it helps to increase the scale of new insights; and it helps to identify which employees can best tackle your most pressing problems. The Next Frontier Diversity of thought refers to a concept…

Karen Christensen: Your job entails advocating for the importance of gender diversity to the Canadian economy. How would you summarize your argument? Jennifer Reynolds: If you want to have a competitive edge, it just makes sense to use the whole talent pool. How can you possibly think you’ve got the best talent, if 50 per cent of the talent pool is absent from your leadership team? In Canada, 62 per cent of university graduates today are women, so for those who disqualify women, the leadership pool is actually shrinking. Most of your career was spent in investment banking. What key lessons did you learn about excelling in this environment? At the end of the day, it’s about being able to take in a huge amount of information and recognize what’s…

MODERN ORGANIZATIONS PLAY A KEY ROLE in perpetuating economic inequality in society. Despite the proliferation of equal opportunity and diversity initiatives, discrimination on the basis of race remains particularly pervasive in North American labour markets. Résumé audit studies — experiments that submit résumés in response to actual job postings — consistently show evidence of race-based discrimination: Résumés containing minority ‘racial cues’ — such as a distinctly African American or Asian name — lead to 30 to 50 per cent fewer callbacks from employers than do otherwise-equivalent résumés. Although the research demonstrates persistent discrimination, one of the ways in which candidates attempt to proactively avoid anticipated discrimination has been largely overlooked: Changing how they present themselves — especially in relation to racial cues — when applying for jobs. We recently set…

SOCIAL CLASS — defined as one’s relative socio-economic rank in society — is one of the key factors shaping educational and economic trajectories in a powerful way. Research shows that social class of origin — whether defined by parental income or education — affects a child’s future educational, occupational and economic attainment as well as their mental and physical well-being. But the existing research neglects a vital dimension of economic stratification: employment. Employers are the gatekeepers to jobs offering varying levels of economic and symbolic resources, and their hiring decisions shape individuals’ economic trajectories. Working alongside Professor Lauren Rivera of the Kellogg School of Management, I recently investigated employment discrimination on the basis of social class signals in an elite U.S. labour market. Because previous research suggests that effects of…

AFTER JUST SEVEN YEARS IN EXISTENCE, Xiaomi, the world’s fourthlargest smartphone maker, has carved out a successful, innovative space in a category dominated by mega-sized tech firms; GoPro makes rugged cameras for outdoor use that have earned it a fervent following, even though it essentially replicates a feature your phone already has; and CrossFit has enjoyed explosive growth for more than a decade, despite a steady stream of critical press since its inception. How did these companies pull it off? The prevailing explanation for such successes has leaned toward intangible qualities like purpose and culture. I am inclined to agree. Companies are composed of people, after all, who spend most of their time communicating with other people. The purpose that unites them, and the culture that shapes their actions, are…

How would you describe the differences between inequality in Canada and in the U.S.? In both countries, at one end of the spectrum, we have poverty, and on the other, we have the 1%. Actually, I should say the .01%, because that is the group I am most afraid of. In the U.S., this rarified group of some 10,000 families is frighteningly rich and powerful, and has increased its share of wealth vastly since the 1960’s. That shouldn’t come as a surprise to most people. We’re all used to reading about the CEOs of companies like Google becoming extremely rich. What is more disturbing is what is happening on Wall Street: In the last 30 years, its leaders’ share of all available U.S. profits skyrocketed from a modest eight per…

THE INCOME DISPARITY between the ‘haves’ and the ‘have nots’ is greater today than at any time since the Great Depression. As a result, children are spending their formative years in vastly different environments: Some grow up in resource-rich environments; others, in poverty. Research indicates that these differences matter: Parental income has important consequences for people’s lives. Individuals with higherincome parents exhibit better health and lower mortality rates, but were found to be less generous than individuals with lower-income parents. These findings suggest an interesting possibility that has received little attention in the management literature: Growing up in a rich or poor environment may have implications for how people interact in organizations. In particular, parental income may be important for leadership. In my recent paper with Sean Martin of Boston…

1. Labour force participation. The greater the number of women participating in the formal economy with paid jobs, the greater the opportunity and upside for economic growth. 2. Rising education levels. In many parts of the world, girls now outperform boys academically and more women are getting college degrees than men. 3. Purchasing power. The global purchasing power of women was estimated at $15 trillion in 2015. 4. Gender pay gap. Women working full-time in the U.S. earned 79 per cent of what men earned in 2014. 5. Unpaid work. Women still do far more unpaid work than men. The OECD defines unpaid work as “an important aspect of economic activity” that is indispensable to the well-being of individuals. 6. Women entrepreneurs. Even with challenges in accessing capital, 200 million…

You are known for your ongoing dedication to advancing inclusive workplaces. When did you first embrace this challenge? About 10 years ago, when I was a partner at Spencer Stuart, I noticed that many of my clients were asking me to help them bring more female candidates to the table at the Board and executive level. It quickly became clear to me that this was no easy task — both as it related to developing candidates and convincing board members and senior executives that a female candidate might be the best candidate. Soon after that, I took on the leadership of the firm’s Canadian Diversity Practice, where I was responsible for ensuring that we were putting forward diverse candidates. I actually coled the search to place my predecessor, Deborah Gillis,…

The term ‘feminism’ used to have negative connotations, but today it seems to have mostly positive connotations. How did this occur? I wouldn’t say that is true across the board. In many places, feminism still has the same — or even more — negative connotations. But a big part of the shift we are seeing is due to who is identifying with feminism. In the last decade or so, the Internet and social media have had a huge impact on how young women learn about feminism, the context in which they learn about it, and the associations they have with it. In the past few years, a lot of celebrities have begun claiming it, so it’s become a much more of a popular way to define yourself. When I think…

As tough as it is for talented women to climb the corporate ladder, female entrepreneurs may have it even harder: According to a U.S. Senate report, a paltry 4.4 per cent of the total value of small-business loans went to women-owned businesses in 2014; and last year, Bloomberg reported that women comprised only seven per cent of founders receiving US$20 million or more in venture capital. For investors, fixing the flaws in the entrepreneurship ‘meritocracy’ would result in better decisions and higher returns — ultimately benefiting the entire ecosystem. In my research with Peter Roberts of Emory University, we are using a gender lens to scrutinize the performance of ‘innovation accelerators’ — programs whose explicit goal is to give a boost to new entrepreneurs — with two questions foremost in…

Canada’s commitment to inclusive growth and its ambitious plan to revitalize its economy, foster long-term growth and strengthen the middle class provides a model for the international community. Central to this plan is Canada’s continued commitment to diversity, immigration and global investment. Canada’s approach recognizes that there are no quick and easy solutions to fostering, broadly-shared growth, which is why its government is using a broad set of policy levers. It began by taking steps to create fairer income distribution through the provision of direct income support. Benefits for low- and middleincome families with children were increased, which is expected to reduce the number of children living in poverty by roughly 40 per cent. Income taxes have also been reduced for nearly nine million middle-class Canadians. The government has taken…

“They all die!” We were on our way out of a screening of Rogue One – A Star Wars Story, and the 8-to-10-year olds in the group were consumed by the realization that every single main character had died. This was not what they were expecting. To those of us who understood more about the saga, this was less shocking: We saw that the plans had gotten out to the Death Star in time, renewing the ongoing clash between the dark side and The Force: There would be another sequel. The word rogue can be applied many ways, but a general definition is the idea of being outside of the norm — an outlier. On January 20, 2017, a new kind of rogue assumed the presidency of the United States.…

Kenneth J. Fredeen General Counsel, Deloitte LLP ALMOST TEN YEARS AGO, when I was asked to be on Deloitte’s original diversity council and to be the executive sponsor for its LGBTQ network, I felt honoured. Although I have family members and friends who are gay, I soon realized that we had lots of work to do in becoming an inclusive culture for members of the LGBTQ community. As a straight man, there are some who see what I did as a courageous act, but it never felt that way to me. There were some whispers that I was gay, but that didn’t bother me. I am still asked sometimes, ‘What is your vested interest in doing this?’, and I honestly don’t have one. It all starts from my belief that…

MOST PEOPLE GROWING UP in advanced economies since World War II have assumed that they and their children will be better off than their parents and grandparents — and for most, that assumption has been correct. Over the past 70 years — except for a brief hiatus in the 1970s — buoyant economic growth has meant that all households, especially those of the Baby Boomer generation, experienced rising incomes, both before and after paying taxes and receiving government transfers such as unemployment or social security benefits This positive income trend has come to an abrupt halt in recent years: Our research shows that in 2014, between 65 and 70 per cent of households in 25 advanced economies were in income segments whose real market incomes — from wages and capital…

THE AMERICAN DREAM is not unique to America. Parents the world over harbour the hope that if their children work hard and build their skills, they can climb the income ladder and attain a higher standard of living. However, the odds that children will rise above their life’s station are more promising in many industrialized nations than they are in the U.S.: According to the Economic Policy Institute, Canada, Denmark, Norway, Finland and Australia offer the greatest opportunities for upward mobility. Meanwhile, the UK and the U.S. lag behind, just a couple of notches above countries with much smaller economies like Slovenia and Chile In their 2016 study, “The Fading American Dream,” Stanford Economist Raj Chetty et al. revealed that the probability of children earning more than their parents has…

There is some disagreement about the ‘business case’ for gender equality. What is your take on it? The disagreement is justified. The focus to date has largely been on the diversity of corporate boards and senior management teams, and the problem is, we don’t have the data required to make solid conclusions. Even when we find a correlation between gender diversity on a board and a company’s performance, we have no way of proving that there is a causal relationship going on. Recently, a meta-analysis came out, summarizing abou t 120 studies, and it did find a small positive correlation between gender diversity and overall firm performance. But again, this was a correlation, not causation. If we want to establish causality, we will have to create teams randomly and measure…

Everywhere you look today, people are talking about inequality in developed countries. One simple way to measure that is to estimate top-income shares: What share of total, pre-tax income goes to certain groups—such as the top 10% of families, the top 1% of families, or the top 0.1% of families? Advanced economies typically started their progressive income taxes a century ago. Thomas Piketty first studied the case of France, and shortly thereafter, together we studied the U.S. Since then, over 25 countries have been studied through a collective effort involving many researchers. The data are posted online in the World Wealth and Income Database — a global project that includes statistics covering North America, most of Western Europe and a number of developing countries, such as China and India. As…

CHANGES IN WEALTH and income inequality around the world are largely the result of two structural changes in society: The role of government and the dynamics of economic change. Neither have been particularly controversial until the publication of Thomas Picketty’s Capital in the Twenty First Century (2014). Picketty’s book is an exhaustive analysis of changes in wealth and economic growth over time. Unto itself, the analysis is not that controversial, but his conclusion is: When the return on capital exceeds the rate of economic growth, the ratio of wealth-to-GDP inexorably increases over time. In a free market economy, what inevitably follows is that ‘inequality’ naturally increases as the wealthiest sit back, clip their coupons and live off of their growing wealth. Picketty’s analysis touched a chord in many countries, particularly…

ARE STRONG MARKET-BASED ECONOMIES more socially equitable? My current research looks at whether the strength of market economies — based on factors such as the robustness of capital and labour markets — relates to income equality and life expectancy in those countries. According to my analysis of current patterns in more than 160 countries, the answer is Yes: On average, a stronger market orientation correlates with both more-even income distribution and greater longevity for people born in that country. These results stand in the face of recent populist arguments in the U.S. and Europe that are seeking to overturn market-based institutions. At the same time, though, the patterns I have observed highlight limits in market-based institutions and point to a need for more thoughtful social policies as complements to market…

1. FLEXIBLE WORK ARRANGEMENTS. Once seen as an employee benefit or an accommodation for caregivers (primarily women), FWAs are now an effective tool for organizations to attract top talent as well as a cost-savings measure to reduce turnover, productivity and absenteeism. What can leaders do? • Switch the focus to productivity and results, and not time spent at the desk. • Seek out managers who currently work flexibly and find out what works and what doesn’t. • Encourage your own team to be a role model and consider utilizing FWAs. 2. EQUAL PAY. It’s 2017, and women around the world continue to face a wage gap. In fact, women on average will need to work more than 70 additional days each year just to catch up to the earnings of…

SARAH KAPLAN: Most of us recognize that there is lots of inequality out there. My thought is that in order to make change, we’re going to have to talk about it — and it can’t just be the people who are being disadvantaged talking amongst ourselves; we also have to have conversations with the people who have historically been in positions of privilege. JAN MAHRT-SMITH: I fit the bill: I don’t think I could have come from a more privileged position in society — yet I never even realized that I was privileged. I guess true privilege is when you don’t even recognize that you’re privileged. SK:You do fit the bill, but at the same time, that doesn’t mean you need to speak on behalf of all white straight men.…