Alongside Jane Halton AO PSM GAICD and Peggy O'Neal FAICD, Elizabeth Proust discussed the opportunities and challenges in levelling the playing field for women in corporate Australia.
Thank you, Sabra. Thank you for the invitation to speak to you today. I would like to begin by acknowledging the Ngunnawal people as traditional owners of the land on which we are meeting today.
Today I am going to cover the corporate sector. However, in terms of the public service, when I started my career in the Victorian government in the early 80's, I would have thought standing here today this would be a conversation we would have long past. In the early 80's, I was Chief of Staff to the relatively new premier of Victoria, John Cain.
Unsurprisingly perhaps for the time, all of the departmental heads were male as were almost all of the senior ranks. John and his Ministers made some simple changes that were not necessarily welcomed by those gentlemen.
All interview panels for roles, especially senior roles, had to include at least one woman and all shortlists had to include at least one woman. Public servants at the time, became extremely busy on interview panels. By the 90's it wasn't a major issue in Victoria, or other public services, although Jane will talk about some of the issues that still exist today. I will leave the public sector to Jane, apart from that comment.
I will start by saying the corporate sector has failed to keep up, I believe, with the public sector in this country.
Is that because women are less effective leaders than men? Because many choose to have children and they shouldn't expect not to suffer as a result of that?
Is it because every man is appointed on merit?
Or is it because, and I want to quote from an email I received from a man earlier this year after I made some comments about gender diversity - is it because when a woman is appointed to a board it takes away a job from a good man, which, in turn, not only hurts that man, but his wife?
Perhaps you are not all aware that dinosaurs still exist and that is one of the more polite exchanges - I won't share some of the others when I am trolled on the topic.
We do at the AICD still hear those sorts of comments. Perhaps I could have some sympathy with them if we saw boards or executives suites largely populated by women, but we don't see that.
Merit is simply not a valid argument for where we are at in 2017.
This year, seven out of ten board appointments across the ASX 200 has been a man.
That is true even in the case of women graduating in higher numbers across most academic fields for decades. 55 per cent of all university graduates in Australia are women. So why is it by the time we get to the executive ranks that number is 20 per cent and on boards of our largest companies, around 26 per cent?
It is not a supply problem. It is a demand problem.
I think it is time for us to face the facts, corporate Australia has a culture that overwhelmingly promotes and rewards Anglo-Saxon males. It is clear that because of this, the top of our corporate sector doesn't reflect our community or the widespread talent within it.
The problem is not just shareholder and stakeholder returns, nor even one of equality. Business leaders need to consider if their people look to the top of their organisations, to the boards and to the executive and only see white men, then all of the people who don't look like that may think their company doesn't value them or care about them and their customers may think the same.
In 2017, there are more men named Peter than women who are considered meritorious enough to be CEOs and Chairs of our ASX 200 companies. I don't mean to pick on Peters. The same goes for Johns and Davids.
What drives this is not necessarily some burning desire to treat the glass ceiling as if it is a floor. It is often that we often have an idea of what a leader looks like and that picture is usually a tall, white male.
Some years ago Michael Gladwell polled half the Fortune 500 companies in America and what he found is that men who were 6 feet tall, in the American jargon, or taller made up about 15 per cent of the US population, and among the Fortune companies made up 58 per cent.
This is not necessarily evidence that boards are looking for a tall man, but it can show when someone looks like what we think a leader looks like walks into an interview room, they have an advantage - presumption of merit.
So what do we need to do? The AICD will continue to advocate for greater diversity, and not just gender, on our boards because, as we see it, diversity is vital to the future of good governance in this country and not just in business.
For those of you who are not aware of the numbers, we at the AICD began tracking this in 2009. At the time, women made up 8.3 per cent of directors on ASX 200 boards. We set a specific target for the end of next year, 2018, of 30 per cent female representation on ASX 200 boards. Last year we were fairly confident we would reach that target. The monthly rate of appointments to ASX 200 boards was 44 per cent. The highest rate since we started tracking. However, 2017 results have been less promising. The monthly appointment rate has fallen back to about 35 per cent.
The maths tells you that if it stays that way we don't get to 30 per cent by the end of next year, even though the rate is currently 26 per cent. This afternoon, the AICD will release our latest quarterly report on gender diversity, which shows attend of November women accounted, as I said, for 26 per cent of ASX 200 directorships and the number of ASX 200 boards has doubled from 2015 this year from 25.
The number of boards without any women has fallen 75 per cent from 30 in 2015 to 8 at the end of November.
There are still 57 ASX 200 companies with only one woman and you could surmise that a number of those have put one woman on the board, which doesn't equate to gender diversity, to get organisations like mine off their backs.
The research on the business case for diversity is overwhelming. Homogeneous boards and management teams don't make better decisions. They just think they do. Diverse boards and leadership teams lead to better outcomes for stakeholders and shareholders. They lead to greater innovation and better bottom lines.
The research, as I said, is overwhelming. Despite this, Australian boardrooms and executive suites are woefully lacking. Diversity, not only with regard to women, but in another area where Australia should do much better: cultural diversity.
We all need to do more and that includes men doing more. I have heard a lot from men about gender diversity and their support for it. In January this year when the 30 per cent club put on a breakfast event aimed specifically at men with an all-male panel ‘Calling All Men’ only 13 per cent of the audience was male.
I challenge you to look at the boards below the ASX 200. The ASX 200, as I said, has seen significant improvement. That is because they are largely household names where shaming and naming does work, but below that it is single digit in the ASX 200 and below.
Women sponsoring fellow women alone will not do enough to change the gender imbalance at the top of our corporate hierarchies. Men, as well as women, need to consciously identify women, the same way that we all consciously identify someone as a future leader and sponsor them to succeed.
Business can, despite our current low level of trust, can be a force for good and it should be an advocate for the kind of society that we want to see. My message to corporate Australia would be to look at your board, your senior leadership and ask: Does it reflect the people who work for you? Does it reflect your customers and does it reflect your community? Thank you.
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