The goal of 30 per cent female representation on ASX boards is in sight, but maintaining momentum is crucial, writes John Brogden.
In 1982 Yes Minister brilliantly satirised the opposition of male bureaucrats to appointing women to senior positions in the public service.
Sitting around a board table, the all-male permanent heads enthusiastically support the idea of appointing more women to senior roles. However as they went around the table, each in turn finds an excuse as to why appointing women to senior roles wouldn’t be appropriate for their particular department. Sir Humphrey Appleby sums up their concerns: “We must in my view, always have the right to promote the best man for the job – regardless of sex.”
Over 30 years later we can be thankful that much has changed.
In April 2015, the Australian Institute of Company Directors (AICD) adopted a policy that all Australian boards should have 30 per cent woman and an ambitious target for ASX 200 Boards to achieve 30 per cent female representation by the end of 2018. For the first time, the ASX target is in sight.
The AICD’s latest Gender Diversity Quarterly Report reveals that women now comprise 23.8 per cent of ASX 200 boards and 29 per cent of ASX 20 boards. It also shows that 53 ASX 200 boards have reached the 30 per cent target. While there are still an extraordinary 22 boards without female representation, it is a far cry from 2009 when women accounted for a paltry 8.3 per cent of ASX 200 directors.
More importantly, new analysis of appointment and exit rates, commissioned by the AICD and conducted by Mercer, shows that if the current rate of female appointments to ASX 200 boards is maintained, we will achieve 30 per cent female representation on ASX 200 boards by the target date of late 2018.
The Getting to 30% – Are we on track? report also looked at how many men and women sit on multiple ASX 200 boards, tenure and its link to gender, and whether female chairs begot a higher percentage of female directors.
The research found that women held 1.4 board seats compared to 1.2 for their male counterparts. While this figure is statistically significant, in real terms there are actually an equal number of men and women that sit on three or more boards. The report found that until the number of women increases, it would be difficult to conduct a proper like-for-like comparison.
To truly have diversity in our boardrooms however, the number of women has to reach critical mass.
The report also found a strong link between gender and tenure, with men holding 92.5 per cent of boards seats tenured for 11 or more years, which represent 12.7 per cent of all board seats, as well as a correlation between female board chairs and increased gender diversity on a board.
Make no mistake, diversity at the boardroom table does matter. A room full of Sir Humphreys doesn’t lead to better outcomes. Mono-cultures may feel more comfortable, but they are more likely to result in groupthink and reduce dynamic decision making. Neither of those traits are what the boards of the 21st century should aspire to.
To truly have diversity in our boardrooms however, the number of women has to reach critical mass. Critical mass is key for women, both in and outside of the boardroom. As The Washington Post reported in their Women in Power series last month, in his first term even top aides to President Barack Obama complained of having to elbow their way into important meetings and of not having their voices heard once they were in the room. That changed in his second term, with the appointment of more women and the promotion of others.
Research shows that the presence of 30 per cent is the tipping point where critical mass is reached in a group setting. It is the difference between having a seat at the table and having a voice at the table.
That’s why it’s crucial for ASX 200 boards to meet the critical mass of 30 per cent. From there we can go further, but we need to reach the goal first.
Australian boards need to be more representative of the population at large and they need to act as a positive advocate for change that brings together disparate voices in the debate. For ASX 200 boards that goal is now in sight, but we will only reach it if we maintain the momentum.
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