Canadian board directors are bullish on the economy

But they are positive about governance, inclusion

Canadian board directors are bullish on the economy
Steve Randall

Most board directors of Canadian companies do not expect improvement in the economy over the next five years.

Just 28% believe there will be improvement in the Canadian economy in the next 2-5 years, down sharply from the 52% who said so a year ago. Just 29% believe there will be improvement in the global economy in that time period, down from 43% a year ago, with 40% expecting it to worsen.

The findings from a survey by Environics for the Institute of Corporate Directors also reveal that 45% believe that Canada’s political stability will worsen in the next 5 years, up from 25% a year ago.

“Directors are concerned about both the Canadian and the global economic environments,” said Rahul Bhardwaj, President and CEO of the ICD. “Persisting trade uncertainty and protectionism, unpredictable political decisions driven by nationalism and populism, as well as new provincial governments in certain parts of the country are just some of the factors driving this lack of confidence.”

Canadian values are an advantage
Three quarters of respondents said that Canada’s tolerance and inclusiveness are a competitive advantage and overall governance is also see as positive by 71%.

However, they did express concern about perceived weaknesses that serve as a drag on Canada’s competitiveness, including business taxation, R&D innovation, and regulatory enforcement.

“It is clear that directors recognize that Canada has some core assets such as inclusiveness, tolerance and good governance. These important cultural qualities help us attract the best and the brightest, and will drive the knowledge economy going forward,” said Bhardwaj. “While recent initiatives to address capital investment should be helpful, it’s also critical for our future prosperity that we leverage our cultural strengths and continue focusing on Canada’s business climate.”

Workplace matters
Directors are concerned about the wellbeing and productivity of their staff and almost three quarters have developed or discussed strategies to address wellbeing including mental health.

Issues related to the legalization of cannabis (47%), an aging population and its impact on the workplace (48%) and rising income inequality (31%) were less likely to have been discussed as strategic issues.

 “While directors have yet to address certain human capital matters that will demand greater attention moving forward, they are recognizing the importance of developing strategies that support the wellness of their employees,” said Bhardwaj. “This is crucial to supporting a positive corporate culture, creating a high-performing workforce, and ultimately, strengthening the Canadian economy.”