Australia's Corporate Boards Shrink the Gender Gap
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Critics warn that quotas may be necessary to reach parity, but Down Under they’re making progress without them.
By Jamie Smyth
For months Australian politics have been engulfed by allegations of a culture of sexism, which prompted at least one female member of Parliament to resign.
But recent figures indicate that the country — which is regularly lampooned for its “good old boy” culture — has leapfrogged the U.K., Canada and the U.S. in terms of female representation in the boardroom, and it has ambitions to go further. While critics worry that more drastic measures may be needed to continue the push toward gender parity, statistics published by the Australian Institute of Company Directors show that …
Almost 1 in 3 company directors in Australia is now a woman.
The survey found that 29.7 percent of directors of companies listed in the top 200 of the Australian Securities Exchange (ASX) were women, up from 19.4 percent in 2015.
“Australia has heard the message about the value of gender diversity in boardrooms,” says Angus Armour, AICD managing director. “Diverse boards are an antidote to groupthink and lead to better outcomes for shareholders, consumers and the community.”
There are only four ASX 200 companies with no women on their boards, and 45 percent of all director appointments in 2018 were women. Fortescue, a large mining company, now has 55 percent female directors, including its chief executive, Elizabeth Gaines.
Australia’s success stands in contrast to many other countries, which are struggling to boost female participation on boards. It has been achieved without implementing gender quotas — a policy that has helped global leaders, such as Norway and France, to recruit and retain women on boards.
Instead, in 2015 the AICD set a nonbinding target of 30 percent women for ASX-listed companies, which were encouraged to boost diversity in their own interests rather than face any sanctions.
“Just imposing a quota doesn’t achieve the type of cultural change you want to achieve,” says Armour, who opposes their introduction.
Research published in The Leadership Quarterly shows setting targets and creating reporting requirements for companies in the U.S. led to increased diversity in Fortune 500 companies. But some diversity advocates have said targets alone were not working and that investor activism from Australia’s $2 trillion superannuation sector has been a driver.
In 2015 the Australian Council of Superannuation Investors, an umbrella body representing the sector, began urging its members to vote against companies with no female directors.
Critics say the jump in female participation at board level does not automatically translate into influence, and it may prove difficult to maintain the 30 percent level without quotas.
“We decided a tougher approach was required, and we introduced a target of 30 percent women on boards along with a policy of voting against directors on boards that failed to move toward this target,” says Louise Davidson, the CEO of ACSI.
A year later AustralianSuper, which manages $80 billion in assets, wrote to 17 companies with all-male directors warning them they would face a “no” vote unless they appointed female directors.
“The investor market realizes that when you have diverse boards, you have improved performance,” says Vanessa Guthrie, a director of Santos, an Australian oil and gas company.
But she says the gender targets, increased focus on the targets and peer pressure among board directors were all drivers toward greater diversity.
Critics say the jump in female participation at board level does not automatically translate into influence, and it may prove difficult to maintain the 30 percent level without quotas. They point to the small number of women in chief executive or chairman roles at companies listed on the ASX and note that many women sit on multiple boards — a phenomenon that may limit the amount of new female entrants.
“We used to think of the director suite as an all-male closed shop. It’s now more of a conservative closed shop,” says Helen Bird, an academic at Swinburne Law School, Melbourne. “We still don’t have a big influx of new women onto boards … If you are serious about keeping women in these positions, then you need quotas.”
In Australian politics, the issue of quotas has exploded onto the agenda following the resignation in November of Julia Banks from the ruling Liberal Party. She criticized a “scourge of cultural and gender bias, bullying and intimidation” in politics and warned that the treatment of women in Parliament was “years behind” business.
The Liberal Party, which opposes quotas, has denied the claims, but several other female Liberal MPs have subsequently said they will not contest the next election. Just 12 of the government’s 74 members of Parliament are women.
“There’s the blinkered rejection of quotas and support of the merit myth, but this is more than a numbers game,” says Banks.
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