THE DISTILLERY: Boardroom clout

The latest numbers from the Australian Institute of Company Directors indicates that the progress made elevating women to the boards of Australia's top companies is tediously slow. Every time these numbers come out, the quota argument pops up.

Critics of company quotas for female directors argue that it undermines the concept of merit-based promotion and misses the point that it's actually retaining women earlier in their career that's the real challenge.

Supporters counter that merit-based promotion is a poor argument to defend some of the stiffs lingering frozen in director's chairs well beyond their prime. A change in culture is coming, but too slowly. Quotas would hasten the thaw.

This morning, two columnists offer carefully qualified critiques of the pro-quota argument, while offering suggestions of how to increase female count at the top of our biggest companies.

Fairfax's Adele Ferguson says the big concern is not actually the representation of women on company boards, which is poor but improving. The problem is that the proportion of women appointed to senior management positions is not growing, which means the stocks from which to draw the next generation of female board representatives is not stronger than the last.

"Where will that leave the pipeline and will it result in no women at the top of the management pipeline? Prue Gilbert Consulting's Prue Gilbert, who specialises in advising companies on strategies for retaining women, says the statistics don't surprise her. As for all the talk at the top about financial benefits of gender balance, the gender equity drive has not focused organisations' attention on the women who are leaving. ‘It's too easy for women in their 30s to leave. I coach women back to work after maternity leave, and am all too familiar with the deeply entrenched cultures that have created layers of red tape for women to wade through in order to be a working mother,' she says.”

The Fairfax writer argues that retaining women in the workplace generally is just as important as ensuring promotional opportunities are there for them. Ferguson stops short of calling for quotas, but does hint that the ‘merits' arguments doesn't look good given the lingering presence of directors "of the male privilege club who are past their use-by dates".

The Australian Financial Review's Chanticleer columnist Tony Boyd does tackle the question of quotas head on. He argues that the suggestion of former Caltex general counsel Helen Conway, now head of the Equal Opportunity for Women in the Workplace Agency, that quotas should be considered if numbers don't improve by 2015 or 2016, is "misguided”.

"If you talk to the companies that have been successful in lifting the participation of women in senior executive ranks, such as the big banks, they do not agree that quotas would be effective. They say that imposing externally enforced quotas for female participation would lead to bad outcomes such as women not promoted on merit and men using quotas to sabotage the system. Also, quotas would not deal with the unconscious bias against women that exists within many companies. The unconscious bias problem has been confirmed in research conducted by the Melbourne Business School Centre for Ethical Leadership on behalf of ANZ Banking Group, according to ANZ's Susie Babani, who is the bank's group managing director, human resources. The wise heads who have achieved female participation in management ranks of 40 per cent of more in the space of a few years say that targets or objectives are much better than quotas.”

Meanwhile, The Australian's John Durie says the Future Fund is paying a "full price” for its $2 billion investment in Australian Infrastructure Fund airport assets, but there's good reason for that.

"Airports are classic infrastructure investments, given they are natural monopolies with high barriers to entry, have relatively inelastic demand, are highly regulated and are long-life assets. This portfolio was also an "all in the family" deal for the fund, given its in-house infrastructure guru Ralph Arndt learned his trade at the feet of Hastings founders Mike Fitzpatrick and Paul Espie.”

Business Spectator's Stephen Bartholomeusz says the price reflects a reality that AIX has been in play since August and given that no alternative has emerged, the Future Fund looks to have won the day.

"AIX owns 12.4 per cent of Australian Pacific Airports Corporation, which owns the Melbourne and Launceston airports, 29.7 per cent of the Perth Airport group, 49.1 per cent of Queensland Airports – Gold Coast, Townsville and Mt Isa, 28.2 per cent of Airport Development Group – Darwin, Alice Springs and Tennant Creek and 40 per cent of Hochtief Airport Capital – Sydney, Hamburg, Dusseldorf and Athens. A complicating factor is the existence of a web of pre-emptive rights held by other investors in the underlying airports which would be triggered by the Future Fund deal and which could diminish the size of the transaction, although the value the Future Fund has attributed might deter some of those investors from exercising their rights.

Meanwhile, The Australian's Judith Sloan says the governance model for industry superannuation funds is problematic in a number of ways, using their vulnerability to union demands as a key example.

And finally, The Australian Financial Review's Matthew Stevens examines the target statement from Discovery Metals that rebuffed the offer from Cathay Fortune as inadequate. Stevens point out that the offer didn't come up short by much.