ONE of the things to remember as we consider what to do about the chronic under-representation of women in senior management in this country is that there are real forces massed against women in the workforce. It will take structural changes as well as cultural ones to overcome them.
Women's careers are harder to construct, and more difficult to manage, in a nutshell. Women and only women can bear a child, for example. They take time off work if they do, and are more likely to assume early childcare responsibilities. That means they are more likely to interrupt their careers - and because families are waiting longer to have kids, the interruptions occur at a more telling time in their career path.
The median age for all mothers for births in Australia in 1971 was 25.4 years. By 1990 it had risen to 28.3 years, by 2000 it was 29.8 years, and in 2006 it hit 30.8 years. It was 30.7 years in 2011, with the average age of first-time mothers sitting at 28.9 years.
There's some complicated cause and effect loops at work and some very interesting ideas about breaking down barriers now being deployed, but first let's recap the results of the census of women in leadership that was released by the Equal Opportunity in the Workplace agency on Tuesday.
Greater focus on the low representation of women on major company boards in the past couple of years has seen the percentage of female directors of ASX 200-listed companies rise from 8.4 per cent in 2010 to 15.1 per cent, but the percentage of women in senior executive positions is significantly lower. On one measure, it has fallen from 12 per cent in 2006 to 10.1 per cent this year. On another, it has crawled up from just 8 per cent in 2010 to 9.7 per cent.
The low and possibly stagnating participation of women in company leadership is unfair on a fundamental level and it's also dumb. A valuable human resource is being inefficiently accessed and the slight progress being made in boardrooms is in danger of being undermined: director numbers can't keep increasing in a sustainable way if the number of women in executive positions is not also expanding.
Things might improve a bit in coming years in the biggest companies, because in 2010 the Australian Securities Exchange's principles of corporate governance were amended to launch a "comply or explain" diversity regime. Listed companies were asked to establish a diversity policy, disclose it, measure the number of women in leadership positions and set "measurable objectives" for increasing diversity. If they did not, they were to explain why.
The regime applied to December-balance companies last year and affects all companies this year, and looks to be working. Of 211 December-balance companies in 2011, 61 per cent established diversity policies, and 59 per cent of those that did created measurable targets.
From next April new federal law will also force companies with more than 100 employees to report how many women they employ and how much they earn compared to their male colleagues.
The real task begins now, however, as the dimensions of the shortfall are finally outlined. Companies have to redesign themselves to remove the roadblocks placed in the way of career advancement for women.
BoardLinks, a network overseen by Finance Minister Penny Wong and the Minister for the Status of Women, Julie Collins, gives rising women executives initial boardroom experience on government boards, and is one such hands-on initiative.
A fairly anodyne release on Tuesday about the need for companies to set targets for advancing women and to report regularly on progress from the Male Champions of Change also underplayed very interesting work under way within that floridly named but undoubtedly influential group, and the organisations its members lead.
The Male Champions are a 22-member group created under the umbrella of the Australian Human Rights Commission that includes some of the highest-rated male corporate talent in Australia. Members include Qantas' Alan Joyce, CBA boss Ian Narev, ASX's Elmer Funke-Kupper, Treasury secretary Martin Parkinson, Woolworths CEO Grant O'Brien, ANZ CEO Mike Smith, IBM Australia CEO Andrew Stevens, Telstra CEO David Thodey, and PM&C secretary Ian Watt.
The group wants to lead by example and it is focusing on nuts and bolts solutions - not just firm targets and regular reports, which are a given, but structural changes that remove barriers.
The idea is always to reform existing corporate processes, not add a new, costly management layer that saps productivity. Diversity targets are being added to remuneration calculations, for example, and more flexible work conditions are being created.
In one company led by a champion of change, less than 10 per cent of the top 80 executive positions have flexible working arrangements, but in-house work reveals that 80 per cent of them are capable of being structured that way, with all or some arrangements including part-time work, job-sharing, work from home regimes and flexible start and finish times.
The company is now testing the demand, by replacing a rule that executives must make the case for flexible conditions with one that states that they are entitled to them unless the company makes the case for the status quo. I expect it will be knocked over in the rush.
In this company there are also de facto quotas. Divisional managers have hard targets for female numbers and all shortlists for jobs must include a woman.
The champions group is also networking employee surveys that all the big companies undertake these days, to see what questions about diversity are being asked, and which ones are resonating. The result may be a template that works for all companies and creates common data. It's many small steps like these that will create the next wave of reform.
Frequently Asked Questions about this Article…
What is the current level of women on ASX 200 boards and in senior executive roles?
According to the census cited in the article, female directors of ASX 200-listed companies rose from 8.4% in 2010 to 15.1%. By contrast, women in senior executive positions remain much lower — one measure fell from 12% in 2006 to 10.1% this year, while another rose only from 8% in 2010 to 9.7%.
Why does gender diversity and women in leadership matter to everyday investors?
The article highlights that low participation of women in leadership is both unfair and inefficient: a valuable pool of talent is being underused. For investors, persistent under-representation can limit management quality and the sustainability of board improvements, so diversity progress can signal better governance and more efficient use of human capital.
What regulatory changes are pushing Australian companies to improve gender diversity?
The ASX amended its corporate governance principles in 2010 to a 'comply or explain' diversity regime asking listed companies to adopt and disclose diversity policies and measurable objectives. The article also says that from next April new federal law will require companies with more than 100 employees to report how many women they employ and how their pay compares to male colleagues.
What practical steps are companies taking to remove barriers and advance women executives?
Companies are reforming existing processes rather than adding costly layers: they are adding diversity targets into remuneration, creating more flexible work conditions (part-time, job-sharing, work-from-home, flexible hours), setting hard targets for female representation, and requiring shortlists for senior roles to include women.
Who are the Male Champions of Change and how do they influence corporate diversity?
The Male Champions of Change is a 22-member group created under the Australian Human Rights Commission that includes senior corporate leaders such as Qantas' Alan Joyce, CBA's Ian Narev and other CEOs and public service heads. The group focuses on practical, structural reforms within organisations — not just targets and reports — to remove barriers to women's advancement.
What is BoardLinks and how does it help rising women executives gain boardroom experience?
BoardLinks is a government-overseen network mentioned in the article (overseen by Finance Minister Penny Wong and the Minister for the Status of Women, Julie Collins) that gives rising women executives initial boardroom experience by placing them on government boards, helping build skills and credentials for corporate directorships.
How are companies testing and expanding flexible working arrangements for senior roles?
The article describes one company that found fewer than 10% of the top 80 executive positions had flexible arrangements, yet about 80% could be structured that way. That company is testing demand by reversing the burden of proof: executives are entitled to flexible conditions unless the company can justify the status quo — a practical step likely to increase uptake.
What should everyday investors look for when assessing a company’s progress on gender diversity?
Investors should watch for a publicly disclosed diversity policy, measurable diversity targets, regular reporting on female representation and pay, initiatives such as diversity-linked remuneration, flexible work policies, shortlisting rules that include women, and participation in programs like BoardLinks or commitments from groups such as the Male Champions of Change.
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