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Women in Leadership: Equality and the Business Case

Speech delivered to the 25th Australasian Finance and Banking Conference

 

Professor Gillian Triggs,
President, Australian Human Rights Commission

 

Monday, 17 December 2012


Acknowledgments and Introduction

Before I begin, I’d like to acknowledge the traditional owners of the land on which we meet, and pay my respects to their Elders, past and present.

I would also like to thank the 25th Australasian Finance and Banking Conference, and Professor Fariborz Moshirian, for the invitation to speak at this forum on ‘Women in leadership” with an emphasis on the business community.

Stimulating my comments on gender equality is the Census released just two weeks ago conducted by the Australian Government’s Workplace Gender Equality Agency under the new 2012 Workplace Gender Equality Act.  This new legislation calls for gender equality in government and the workplace and for equality in respect of pay and flexibility of employment.  The thrust of the Census is that the insurance and banking sectors have the highest percentage of female Board Directors in both the ASX200 and ASX500 and are leading the charge on an increase of women on Boards across the corporate sector.1  Since 2010 there has been a 46% increase in the appointment of women to the top ASX 200 companies and at least one female director is now on 62% of ASX 200 companies. These figures suggest that ASX targets (and reforms such as the Governance Council’s principles of 2011 setting measurable objectives on gender) have generated positive change.

Despite these improvements, however, the numbers still do not reflect a full or encouraging picture. The census also demonstrates a distinct lack of meaningful progress at the executive and management line reporting level.  For example, only 9.7% of key management personnel (KMP) are women, an improvement of just 1.7% over 2 years.

Other evidence indicates that women are distinctly poorer and have less superannuation than men at the end of their working lives. Pay inequity endures and has, in fact, widened since it started being measured in 1994.2  For the purposes of this evening’s forum, it is particularly sobering to realise that the financial and insurance industry had the second highest gender pay gap as of early this year.3

Such startling data indicates that we are achieving only limited success in our current strategies.

So, with this rather mixed picture of gender equality, I would like to discuss how all organisations, whether public or private sector, can do better - being clear about the successes and the challenges that exist; as well as broadening our gaze to benefit not just our own organisations, but the wider economy.

Is improvement of women in leadership in the business community inevitable? What are the challenges?

Are there real impediments to improvement, or is an increase in women as leaders simply a matter of time in any industry that is openly committed to equality? An argument popular at the moment is that such as increase is inevitable; the theory being that the higher numbers of women attaining tertiary qualifications, and their success in adapting to the ‘new digital economy’, means that women are now ready to overtake men in terms of earning capacity and the assumption of leadership and power.4

There is some justification for this view of ‘inevitability’ and incremental nature of change. Indeed, the emergence of a critical mass of women in any particular industry will eventually contribute to an increase of women in its senior ranks. In fact, 30% has been established as the tipping point at which any group can achieve change within an organisation.5 The importance of a critical mass necessary to unpin genuine change is supported by the EOWA Census that shows larger companies with high proportions of female employees were more likely to have female representatives on their Board. For example, ASX 200 companies with high numbers of women employees at all levels, have 19% female directorships, while smaller ASX500 companies with fewer women at lower levels in the company have only 6% women directors.6 It seems clear that there is much more work to be done with small to medium sized companies.

While recognizing the slow, perhaps inevitable improvement, in the participation of women as leaders in the business community the Census reflects another part of the picture. The same Census shows that Australia continues to be outperformed by competing countries, including the US, Canada, South Africa, New Zealand and the UK. Equally, as I mentioned, despite the improvements in women’s representation on corporate Boards, the number of women in line management positions remains negligible.7

More broadly, the World Economic Forum’s 7th annual Global Gender Gap Report showed that Australia’s rank comparative to other countries has been steadily declining – slipping 10 places from 15th in 2006 to 25th in 2012. 8 The Report noted particular weakness in wage equality, as well as in political empowerment. (25% of women in Parliament, 21% in Ministerial positions; unchanged or down respectively,) The World Economic Forum Report also noted that, while many developed countries have closed the gender gap in education, but few have maximised the returns from this investment. Meanwhile, the Grattan Institute has made similar observations, identifying current tax and childcare provisions as major disincentives to Australian women remaining in the paid workforce once they have had children.9

All this means it is misleading to look at the number of women entering an industry and assume that they will follow a natural and inevitable trajectory to the executive. Equally, though an increase in women in senior corporate positions is a significant indicator, we cannot assume that such an increase reflects their full participation throughout that workplace, or indeed, in the wider community. This is particularly so when we understand the curious phenomenon, for example, that female Board directors are more likely than males to hold multiple directorships – suggesting that, though a majority of ASX companies now have a female director on their Board, this does not necessarily translate to an equivalent rate of women achieving seniority.10

There are complexities, then, in the way that gender equality is measured. What this means is that we must take a broader approach – employing a range of strategies that target the development of women at all levels of an industry, and which increase the participation of women in the workforce in general.

We need to understand and build the business case

In order to do so, of course, we must first be upfront about the compelling business case for equality. As President of the Australian Human Rights Commission, my interest is in the elimination of all forms of discrimination as a goal in itself, a goal shared by multiple Australian organisations for many decades as they have sought to respond to the political and social imperative for change.

What has been missing from efforts to strengthen women’s participation in business leadership until more recently, however, is recognition that gender equality is also an internal imperative – that, as well as benefiting individual employees, the increased participation of women also benefits their respective organisations, enabling them to harness a broader talent pool in a shrinking market; to reduce the cost of recruitment and turnover; and to expand their skill base in a progressively complex world.

As the Grattan Institute has recognised, an increase in women’s participation in the paid workforce by just 6% - up to the same rate as women’s participation in Canada – would increase the size of the Australian economy by about $25 billion per year.11

Identifying the challenges

Once this business case is understood, then, the next step for any industry is to confront those barriers that stand in its way – acknowledging that formal equality of opportunity does not guarantee equality of outcomes; and that a range of practical and policy impediments can limit the career progression of many women.

One such barrier is the occupational segregation that, in the financial and banking sector for example, sees a smaller proportion of women in ‘line’ roles, or positions responsible for significant budgets, than in roles termed ‘support’, such as legal or human resources.

This is partly a consequence of the same notorious forces that contribute to women’s attrition at the middle management level in many professions – the perpetual challenge of juggling family responsibilities with expectations of long hours in the office meaning that women are often steered towards roles outside the executive or management track.

Consequently, with smaller proportions of women assuming control of large budgets or numbers of personnel, they are less likely to gain the experience deemed necessary for promotion. In turn, a shortage of women in these visible roles can have a flow on effect for other female employees, depriving them of encouragement, cementing perceptions of isolation at the top and feeding their own reluctance to take the wheel.

Less tangibly, it is just as essential that organisations acknowledge the attitudes which endure in some quarters of almost every industry – attitudes about what constitutes commitment to an organisation; or about what makes a strong and effective leader.

Too often in our efforts to treat women in senior positions as ‘the norm’, we turn a blind eye to the disproportionate scrutiny they can sometimes attract, or to the very gendered, albeit subtle, criticisms that can be directed their way. We need only look to the undeniable chord struck by the Prime Minister’s recent speech about sexism in politics, however; or to the revelations of discrimination in the media, to see it is a subject which Australians feel ought to be discussed.

Bias cannot be effectively addressed when it is tacit or unacknowledged. Whatever view one takes of the contexts in which these statements arose, therefore, the response they met confirms that it is only when we name and identify a problem that we can begin – systematically and respectfully – to counteract it.

Meeting the challenges

How, then, can the financial and banking sectors address these impediments to meeting the business case for equality? There is no doubt that some of the necessary change rests in the hands of public policy makers. Just as certainly, there is a great deal that industries can do as well; and a range of strategies that need to be brought into play.

Initiatives include increasing diversity in appointments to companies and other organisations. Targets are not popular and may not be necessary if we make a conscious effort to cast the net more widely and to recruit from the breadth of the population, rather than just from traditional pools. It also means ensuring that those doing the recruiting are trained to be aware of when they are unconsciously selecting those that mirror their own experience; ensure selection or shortlisting committees have a wide range of age and experience.

A further step includes increasing and encouraging all employees to experience a range of opportunities within the organisation, regardless of historical assumptions about a role’s requirements, for example, what are evidence-based requirements of the job? Closer examination can reveal some surprising results e.g.; modern policing, policy development.

Companies and organisations should also ensure that flexible work practices are mainstreamed, and that flexible practices are encouraged in respect of both men and women. I cannot stress this last point enough, as it astonishes me that we continue to speak of flexible work practices as if they were only relevant to women. This may be an enduring societal perception, but if industries like the banking and finance sector can set an example and value the caring responsibilities of their male employees as readily as they do those of their female employees, then external change will most certainly follow.

Equally, industries must actively encourage women to assume senior positions, particularly when some are reluctant to do so. This can be through mentorship or sponsorship, or through the imposition of formal targets such as the ASX targets imposed by the Government in early 2011. Though I am not in favour of targets in every case, they can kick start the momentum for change and have done so in a number of areas both domestically and internationally.

Finally, every industry can get better at creating opportunities for employees to voice concerns and be properly informed of the case for change. Making this case is crucial as we move from framing the absence of women as a problem to be fixed, to seeing it as an opportunity to be seized. Equally, it can help us stop assuming that women can be ‘accommodated’ by tinkering on the organisational edges, and start acknowledging that change will occur; that it must come from the core, not the periphery; and that, ultimately, it will benefit all concerned.  

Conclusion

In summary, we all profit when each member of a community contributes to its financial and social wellbeing. This means our ambition must be for greater and more equitable participation of women throughout the entire Australian workforce – with all in positions of authority being mindful of the challenges facing those most disadvantaged in their respective industries.

The bottom line is that, regardless of how many women lead the financial or other sectors, we will not have achieved true equality in the workplace while the majority of those in low paid or insecure work are women; or while tax and childcare incentives discourage those with lower earning capacity from workforce participation at all.

We will not have achieved true equality while rates of sexual harassment remain high and continue to have a significant impact on women’s attrition in some professions.12

Many women in positions of authority are aware of these broader challenges and bring to their roles a determination to make the experience better for others.

Whether they do so or not, however, tonight’s topic offers an important opportunity to challenge ourselves further - to look beyond the glass ceiling and consider why all of us – whether in the business of finance, in the business of workers’ rights, or the business of human rights – must collaborate in this broader aim.

The success stories are there, the business case is understood, and the challenges identified. It is now time to ensure that improvements in the number of women in leadership are not just arbitrary snapshots, but genuine windows to a wider equality – an economy that reflects the experience and full participation of every member of our community.


[1]Workplace Gender Equality Agency, 2012 Australian Census of Women in Leadership, p 8. At http://www.wgea.gov.au/Information_Centres/Resource_Centre/WGEA_Publications/WGEA_Census/2012_Census/CENSUS%20REPORT_Interactive.pdf (viewed 13 December 2012).

[2] Equal Opportunity for Women in the Workplace Agency, Gender Pay Gap Statistics, May 2012, p 1. At http://www.wgea.gov.au/information_centres/resource_centre/statistics/gender_pay_gap_fact_sheet_may_2012.pdf (viewed 13 December 2012)

[3]Equal Opportunity for Women in the Workplace Agency, Gender Pay Gap Statistics, May 2012, p 3. At http://www.wgea.gov.au/information_centres/resource_centre/statistics/gender_pay_gap_fact_sheet_may_2012.pdf (viewed 13 December 2012)

[4] See, for example, H Rosin, The End of Men and the Rise of Women, cited in M Beard, The Guardian, Wednesday, 3 October, 2012. At http://www.guardian.co.uk/books/2012/oct/03/end-of-men-hanna-rosin-review (viewed 13 December 2012)

[5] R Kanter, Men and Women of the Corporation, Basic Books, 1977.

[6]Workplace Gender Equality Agency, 2012 Australian Census of Women in Leadership, p 8. At http://www.wgea.gov.au/Information_Centres/Resource_Centre/WGEA_Publications/WGEA_Census/2012_Census/CENSUS%20REPORT_Interactive.pdf (viewed 13 December 2012)

[7]Workplace Gender Equality Agency, 2012 Australian Census of Women in Leadership, p 9.At http://www.wgea.gov.au/Information_Centres/Resource_Centre/WGEA_Publications/WGEA_Census/2012_Census/CENSUS%20REPORT_Interactive.pdf (viewed 13 December 2012)

[8] R Hausan, L Tyson and S Zahadi, World Economic Forum: Global Gender Gap Report 2012, p 100. At http://www3.weforum.org/docs/WEF_GenderGap_Report_2012.pdf (viewed 13 December 2012).

[9] Grattan Institute, Game-changers: economic reform priorities for Australia (2012). At http://grattan.edu.au/static/files/assets/c040e639/Game_Changes_Web.pdf (viewed 13 December 2012)

[10]Workplace Gender Equality Agency, 2012 Australian Census of Women in Leadership p 15. At http://www.wgea.gov.au/Information_Centres/Resource_Centre/WGEA_Publications/WGEA_Census/2012_Census/CENSUS%20REPORT_Interactive.pdf (viewed 13 December 2012)

[11] Grattan Institute, Game-changers: economic reform priorities for Australia (2012), p 39. At http://grattan.edu.au/static/files/assets/c040e639/Game_Changes_Web.pdf (viewed 13 December 2012).

[12] F Tomazin, ‘Female lawyers face barrage of discrimination’, The Age, 2 December 2012. At http://www.theage.com.au/victoria/female-lawyers-face-barrage-of-discrimination-20121201-2ao4u.html (viewed 10 December 2012)

 

Professor Gillian Triggs, President