In the lead up to International Women’s Day, the Australian Institute of Company Directors gathered together seven of Australia’s pre-eminent female directors to discuss the big issues they are confronting around their board tables.

    In a frank and wide-ranging discussion ANZ Director Jane Halton AO PSM GAICD, Qantas director Jacqueline Hey GAICD, Wellcom Worldwide director Janette Kendall FAICD, CSL Limited director Marie McDonald GAICD, JB Hi-Fi director Wai Tang GAICD, Aurizon director Kate Vidgen GAICD and AICD Chairman Elizabeth Proust AO FAICD opened up on executive pay, sweeping technological change, workplace sexual harassment, the current misconduct scandals, whether diversity targets work, and dealing with the uncertain global outlook.

    Note: Comments have been lightly edited and concatenated for clarity, and we have omitted attribution from full comments to respect the open nature of the discussion and rules under which the roundtable was conducted.

    On executive pay

    “If you were to cap, you have to think about the unintended consequences of legislation. Government quite a few years ago required the top five management personnel in any listed company have their remuneration publicly listed. The effect of that was to force everybody’s wages up, the opposite of what was intended.”

    “If you introduce caps in Australia, that hurts international competitiveness.”

    “A lot of the dissatisfaction in the community with executive pay comes from the fact the average worker is getting no increase. They then see CEOs getting a 30% increase, or even a small increase but a total package that is still many millions.”

    “The need for improvement is in communication, in showing that executive pay is linked to performance. If it’s not linked to performance, then significant increases are not justified. It is incumbent on us as directors and companies to better explain with greater transparency how remuneration is structured. And many remuneration reports don’t do that.”

    On non-financial targets

    “There is nothing soft about customer satisfaction, staff engagement and occupational health and safety. It would be unfortunate if the debates we had last reporting season led to companies going back to just financial targets.”

    “Non-financial targets have a horizon beyond one quarter. If you’re not looking at customer satisfaction and you’re not looking at employee engagement, you’re not looking at the long term.”

    On technology

    “Whether technology is doing more harm than good is almost an irrelevant question. It’s coming. We have to prepare.”

    “There is a huge need for people who can do data analytics. And that’s only going to increase. There is an absence in the curriculum of learning about the digital world. It’s really evident many business degrees lack a focus on digital transformation and technology.”

    “It’s not about everyone becoming a coder. With the digital changes, you need people who understand software and coding but you also need people who understand other people. You need people who understand the businesses. I would argue Apple don’t have the best technology but they have great stores, fantastically helpful people and fabulous processes.”

    “A lot of white collar jobs in services will go with the use of artificial intelligence (AI). There is an AI innovation coming in reading x-rays and pathology. A profession that many people trained for years and years and years to undertake, a number of things that they currently do could soon be done completely by AI. There is an element in that of how you manage the workforce transition. But there is also another cybersecurity element overlaid of how you protect that data traveling around.”

    “We are now in an era where we have enormous insight into our customers in terms of their behavioural preferences. An organisation’s ability to use that data raises issues around privacy, security and how an organisation protects itself from cyberattacks.”

    On whistleblowing

    “One of the problems in Australia is the psyche around whistleblowing. It’s seen as almost dobbing someone in.”

    “As directors it’s in our interest to make sure whistleblower processes are working as well as possible so we learn about an issue as early as possible. And to have it working in a way where we try to deal with the issue internally first.”

    “At the moment [legislative] protections for whistleblowers are pretty pathetic in the corporate context. There aren’t appropriate protections under the current regime.”

    On corporate misconduct scandals currently in the media

    “I don’t feel shocked by them. I just feel deeply saddened.”

    “We have all worked with extraordinary men. But there are those men with questionable values in the workplace. They are in positions of power. Their behaviours aren’t regularly challenged. It’s incredibly sad.”

    “When the headlines hit, I became completely sad. I would have thought we were more enlightened, that we had achieved more equality, that respect was more universal.”

    “Dinosaurs still exist.”

    “If you have to deliver some unpalatable news to someone about their behaviour, I’ve found it’s best to explain to them why it’s in their interests to improve. We have these examples, you can now say, ‘If this continues, this is where it can end up.’”

    On the global outlook

    “The mood is more cautious and short-term after Brexit and Trump. Governments aren’t planning long-term. The environment is short-term, reactive and not necessarily conducive to good decision-making.”

    “There is a lot of uncertainty. Boards and companies are looking at scenarios. It’s not the way forward is x. The way forward could be x,y, z, or a, b, c.”

    “You can’t assume the status quo will continue. In the past there was a world order that you thought would continue. But that could actually change. You have to be prepared for that as best you actually can.”

    “Trump is quite clear in wanting to re-assert America’s dominance. For Australia figuring what that means for us in terms of trade agreements is critical. At the same time, we are playing a China card as well. Sitting in Australia we’re trying to have a foot in both camps.”

    On diversity targets

    “When you look at diversity reports that the ASX Corporate Governance Principles require us to publish, a lot of those diversity targets are soft. People don’t do granular targets that set percentages. Rather than having the softer words companies are producing, if you actually set some real targets, that might produce some change. Because once you start reporting that, people notice it.”

    “The 30% Club has been incredibly successful. In setting a target a couple of years ago for 2018 it wasn’t frightening because it was a little down the track. Chairmen embraced it.”

    “The talent is there. We’ve seen [it] in the work of the AICD and the 30% Club. But you still hear, ‘We can’t find a woman,’ or ‘We’ve used up all the good ones.’”

    “It’s not just gender, a large percentage of the Australian population was born in Asia, or is of Asian background. The percentage of people of Asian backgrounds on our boards is probably much smaller than people of American backgrounds or from Europe. There’s a bamboo ceiling as well as a glass ceiling.”

    “The research shows that diversity in decision-making gives you a stronger result. It’s disappointing that senior management in some places is not aware of the research that shows they will get a better outcome with more diversity. Boards have an obligation to make sure they’re talking to their management team about this kind of research.”

    To read more coverage of the roundtable, see moderator and Fairfax journalist Nassim Khadem‘s features in Fairfax’s BusinessDay.

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