Economy and political stability have Canadian directors concerned

Nov 28, 2018
The latest Institute of Corporate Directors’ Director Lens survey shows that board directors have declining confidence in Canada’s economy and political stability, but see governance and inclusion as competitive economic advantages for the country.
Among the results, the survey conducted by Environics Research Group shows that:
  • Of those surveyed, only 28% believe the economy will improve in the next 2-5 years - a significant decline from the 52% who believed it would improve a year ago
  • Only 29% believe that the global economy will improve in the next 2-5 years, compared to 43% who believed it would improve a year ago
  • Forty per cent believe that the global economy will worsen in the next 2-5 years
  • Forty-five per cent expressed concern over Canada’s domestic political stability over the next 2-5 years, believing it will worsen over that time period, compared to 25% a year ago
Read the survey here.
“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.”
Directors see Canada’s inclusiveness and tolerance, as well as governance, as key competitive advantages; more work needs to be done on Canada’s business climate
The ICD survey also shows that seventy-six per cent of directors view Canada’s inclusive and tolerant society as a key driver of our ability to compete on the international stage. Further, seventy-one per cent feel that Canada’s governance makes us more globally competitive. Respondents did identify 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.”
Some – not all – human capital issues on the radar of directors
The results also show that directors are mindful of some of the issues impacting the wellbeing and productivity of those that work at their firms. For example, 71% have either developed or discussed developing a strategy to address workplace health and wellness, which includes mental health. By contrast, 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.”   
About the ICD
The Institute of Corporate Directors is a not-for-profit, member-based association representing Canadian directors and boards across the for-profit, not-for-profit, and Crown sectors. The ICD has more than 13,500 members and 11 Chapters across Canada and fosters the sharing of knowledge and wisdom through education, professional development programs and services, and thought leadership. ICD members across all sectors of the economy oversee well in excess of $1 trillion in market capitalization and institutions that impact the lives of virtually every Canadian.
About the survey
This survey was conducted by Environics Research with 604 board directors between September 15 – October 19, 2018, yielding a response rate of 4.7% overall. A sample of this size produces results that can be considered accurate to within +/4.0 percentage points, 19 times out of 20.