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Knowledge@Australian School of Business

Gender Mender: Are Women Getting Even, At Last?

Published: June 28, 2010 in Knowledge@Australian School of Business
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Australia's first female prime minister Julia Gillard may not have set out to crash her "head on any glass ceilings", as she told the media immediately after being elected leader. But the historic moment when Australia's first woman governor general, Quentin Bryce, swore Gillard into office on 24 June was viewed as an iconic breakthrough in gender equality. In the corporate world, Australia has a "dire" track record for putting women into top jobs, according to sex discrimination commissioner Elizabeth Broderick. However, signs of change are clearly afoot. Programs aimed at promoting women into senior roles in corporations recently have found the support of some big business heavy hitters. And the first half of 2010 has delivered a shift in the number of women on Australian boards, creating high hopes that women in senior roles may finally be getting even.

Some countries are more comfortable with gender diversity than others. Consider Norway, where there's been paid maternity leave since 1935, and where a quota for women on boards was recently introduced. The Norwegian government's minister for women is a 35-year-old man.

Now consider Australia – a modern democracy with a thriving economy – where women hold 8.3% of board positions and represent just 2% of company board chairs and big company chief executives. It may be assumed that it's only a matter of time before bright young, female professionals move up the ladder, but that's an optimistic view when only 10.7% of the female workforce hold executive positions and six out of every 100 are executive line managers. "The status of women's leadership in corporate Australia is dire," says Elizabeth Broderick, Australia's sex discrimination commissioner. "In my office, we sometimes joke that we want to pack up and move to Norway."

In Europe, 9.7% of the members of top European boards are women. However, the Scandinavians boost this figure, with Norway at 44.2%, Sweden 26.9%, Finland 25.7% and Denmark 18.1%. Meanwhile, Italy languishes at 2.1% and Portugal with 0.8%. In North America, the situation is better. In the US, women hold 15.2% of board positions and 31.5% of executive officer positions. And Canadian women hold 14% of board positions at Financial Post 500 companies.

"There are a whole lot of reasons for Australia's woeful track record in terms of representation of women on boards and how it stands relative to other countries," says Judith MacCormick, a post-doctoral research fellow at the Australian School of Business who teaches foundations of board directorship and governance at the Australian Institute of Company Directors (AICD). "There is a lack of experience of women on boards," she says. "By this I mean it's male board directors that have little experience of women on boards. Until they actually get that experience it's going to be difficult to make a change."

Moves are afoot to alter the status quo. The Australian Securities Exchange (ASX) has released an exposure draft proposing voluntary guidelines for companies to adopt and disclose a "gender diversity policy that includes measurable objectives relating to gender". These guidelines are not yet set in stone. Submissions to the exposure draft closed in May.

Meanwhile, the federal government has been trying to encourage more women into the workforce. EOWA, the agency for equal opportunity for women in the workplace, is reviewing pay equity; paid parental leave is finally being introduced and the laws that address sexual discrimination are being strengthened. Some policies, such as a recent move to cut subsidies for parents using full-time childcare, may however, discourage women from staying in the paid workforce. But, as Broderick points out: "The main game is being played in the markets. However, while the men are on the fairway, the women are still in the bushes and I'm determined to get us on to the fairway."

Promoting Women Through Men?

Notably, the sex discrimination commissioner has decided to tackle the issue of promoting women through men. "As depressing as it may seem from a feminist perspective, men make the rules about the workplace," Broderick says. She has launched a program that will use male leaders (chief executives and chairmen) as public advocates for women in business. These men will lead by example, with early adoption of the ASX guidelines. To date Broderick has nine champions and is hoping the chief executives from two large mining companies and a bank will join the coterie.

To track the progress being made by all the programs working towards improving equal opportunity, Broderick has convened an overarching coordinating panel comprising members from key interest groups, the Business Council of Australia (BCA), Chief Executive Women, the AICD and the ASX, to keep in touch with the major stakeholders and make sure there's better infrastructure. "It will work in two ways: disseminating knowledge and providing research into targets, and examining ways to support companies so they comply with guidelines," Broderick says.

One of the programs, the AICD's mentoring scheme, involves 60 chairs mentoring an equal number of aspiring women board directors. While Broderick admires the effort, she believes there will still be a shortfall. "Even if we get [all the mentored women] on boards, that doesn't give us 20% of directors, which is 175 women. If we can't find 175 suitable women for boards in Australian business, there's something wrong with us." But the situation is improving. In 2009, nine women were appointed to boards, but 20 were appointed in the first five months of 2010.

At the operational and executive level, the Business Council of Australia, which represents the chief executives of the top 100 companies, is targeting what its chief, Katie Lahey, calls "the feeder group". It's matching chief executive mentors with women from the BCA's member companies who have been earmarked as potential future occupants of C-suite offices. "The changes at board level are really important because boards are strategic decision makers," Lahey says. "There are enough women to fill those board spots, they've just got to be teased out." But the next occupants of C-suite offices – the CEOs, CFOs and COOs – are going to take a bit longer to come through, says Lahey.

When Lahey proposed the program she expected only two or three volunteers from among the BCA membership. Eleven chief executives put their hands up for mentoring roles. "I think CEOs are grappling with this issue," Lahey says. "They want to see more women in senior roles. Most have policies in place in their organisations but they feel frustrated that things aren't changing and they are looking at what else they can try."

Toppling tokens

Matthew Quinn, managing director of property group Stockland, is one of the mentors. "I like to participate in things that are meaningful, not tokenistic, where there's defined outcomes that can improve the situation," he says. Stockland's record on gender diversity at executive levels is above the national average – it has 35% of women in senior management roles. "Five years ago when we were at 30%, we set a target of 35% – and we will now increase that to 40%. But we have to take the time to get there," Quinn says. Stockland is not alone in its efforts; there are rumblings throughout corporate Australia to right the diversity imbalance. Telecommunications company Telstra last year appointed its first female chair, Catherine Livingstone. It also introduced targets for senior women, who now comprise more than 31% of executive managers at the business.

When Mike Smith was appointed CEO at ANZ in 2007 there were no women on the management board, ANZ's name for its senior executive team. Smith made two appointments in his first 12 months. Today the 13-strong management board has four women, including New Zealand CEO Jenny Fagg and chief information officer Anne Weatherston. In May, recruiters were asked to ensure they always short-list at least one female candidate for all permanent roles across the bank.

Microsoft Australia and New Zealand, with managing director Tracey Fellows at the helm, has made a concentrated effort to develop and lure more senior females over the last few years. The strategy is driven by a desire to employ the highest calibre of talent available in an increasingly tough skills market.While the company has had parental leave for many years, it now encourages and facilitates off-site working and leaves it up to the employee to decide when and where they work – on the proviso that they do not let down customers or colleagues. Recruitment strategies have also been scrutinised. Human resources director Rose Clements says: "For recruiting teams, it's now part of the norm to ask: 'Do I have the best candidate pool, not just in terms of capability, experience and style, but have we got a gender mix? And, if not, why not?'"

A Business Issue

Microsoft's policies have paid off. Now 40% of the senior leadership team is women. "We just want to make sure we are competing for the best talent available and in the IT industry there just happens to be proportionally less women in certain areas than there are men," says Clements. "We just want to make sure we are getting our share, if not a little more." It is a business issue and not about "having representation for the sake of representation". "Our workforce has to reflect the demographics of our marketplace from consumer to enterprise," says Clements.

Certainly, if companies and governments are thinking more about gender diversity in the workforce, it's not for reasons of sexual politics. It's about productivity and growth. Judith MacCormick's research focuses on organisational change in companies globally. "The research shows that companies with diverse perspectives engendered by a diverse workforce perform better on multiple indicators – business performance, staff engagement and customer loyalty," she says.

Peter Wilson, national president of the Australian Human Resources Institute (AHRI), which manages the BCA's mentoring scheme, points to a report produced by Skills Australia that predicted an ongoing shortfall of 200,000 to 250,000 educated professional workers. The lack of gender diversity in Australian business is Wilson's bête noire. As a senior human resources director in some of Australia's top companies, he saw plenty of evidence of "the old boys club". "It's a situation where half the population protects 100% of the top jobs, whether it's executive, CEO jobs or board positions. They work assiduously at it," says Wilson, who has publicly called for greater gender diversity on boards, and in the workforce, through national newspaper columns. "There seems to be something about our culture that keeps the number of women in the workforce low. Australia has a highly effective economy and social system, but we do have some weaknesses and this is one of them. A workplace is part of a just society and this is a major Achilles heel that needs to be eliminated."

However, Wilson is not in favour of board quota and mandatory regulations around gender diversity. The voluntary nature of the ASX guidelines is powerful enough, he states. "If you get some very positive role models embracing these guidelines it does encourage the laggards into doing the same thing," Wilson says. "I'm expecting at least 10% to 20% of companies to embrace these guidelines. You only need a few heavy hitters in each industry, and then the rest will follow. Within two years I expect the vast majority of companies will comply with these guidelines." There's evidence that voluntary compliance may be ineffective though. An EOWA review showed that 35% of companies do not report their diversity figures to the agency. To counter this, it has been suggested that organisations providing goods and services to the government be EOWA-certified.

Certainly Broderick is keen on quotas if the situation doesn't change within five years. "The next step is either to write the guidelines into the listing rules to make it mandatory or to seriously consider legislated gender quotas," she says. And the BCA's Katie Lahey concedes quotas might be inevitable if current efforts come to nothing. "Let's have a look and see how these targets work, and if we start to see some changes fine but if we don't quotas might be the only way we see real change," Lahey says.

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