Businesses will fall behind in the innovation stakes unless they buck the status quo and strive for greater gender equality, attendees at a recent forum were warned.
Last month, the Australia-Israel Chamber of Commerce hosted a media briefing at Sydney’s Shangri-La Hotel. The event saw Lynn Kraus, Managing Partner, Sydney & Oceania Markets, EY moderate a panel discussion on diversity. The speakers were:
- Gordon Cairns, Chairman, Woolworths and Origin Energy;
- Elizabeth Proust, Chairman, Australia Institute of Company Directors (AICD); and
- Lisa Annese, CEO, Diversity Council of Australia.
Here were some of the key insights shared with the audience:
Diversity fuels innovation, success
“You cannot innovate from a place of uniformity. To stay ahead of the curve, you need different points of view, different frames of reference and an enabling culture. It’s easy to create a diverse workforce but harder to create an inclusive environment where everyone can bring their whole self to work and achieve their potential. Innovation is no longer a ‘nice to have’, it’s a must in this day and age and companies that harness the power of diversity will have an absolute competitive edge.” – Lynn Kraus
“This blend of what Australia is becoming – a multi-cultural society – needs to be represented in corporate society, otherwise we’ll be unable to respond to the challenges that we meet in the global economy. We often talk about women as though they are one homogenous group but there are different types of women who represent different cultural backgrounds and age groups. Targeting women as women may in fact lead boards down the path of replicating the same type of woman. We need to open our minds when it comes to diversity. If what you really want is increased innovation, the capacity to solve problems and a turn away from groupthink, then genuine diversity is about tapping into all sorts of people and their differences. The ability to bring people from diverse groups together to work towards a common goal, harness different ideas and get people to think creatively – that’s the skill that’s required we call that inclusive leadership. It’s great HR practice but it needs to be learnt because it doesn’t happen automatically.” – Lisa Annese
“According to the World Economic Forum, ‘the most important determinant of a country’s competitiveness is its human talent – the skills and productivity of its workforce’. In order to succeed, organisations cannot afford to ignore half the world’s population. There is a positive correlation between GDP per capita and gender equality. It’s been found that higher female workforce participation creates productivity gains in industries that have been predominantly male-dominated. More equality and balance on boards leads to better performance and share price. From 2005 to 2014, boards with a higher than average percentage of women outperformed by 36% those with fewer than average. EY’s research with the Peterson Institute shows that when companies have over 30% of women in leadership, they can expect a 6% increase in net profit”. – Lynn Kraus
The long road to gender parity
“It has been 200 years since the industrial revolution sent women into the workforce in large numbers. It’s been more than 150 years since women gained access to higher education in western countries. It’s been more than 90 years in parts of Asia and 80 years in parts of South America since women gained the right to vote, hold a job, go to college, create a business or rise to leadership positions. Despite this progress, there is a 60% gender gap for economic participation and the World Economic Forum estimates it will take 117 years for women to achieve gender parity in the workplace.” – Lynn Kraus
“About 18 months ago, the AICD set a 30% female director target for ASX 200 boards by 2018. The ASX 20 companies have almost reached the target – they’re at 28.5% –and at the current rate of appointment of women to ASX 200 boards, there is a reasonable chance the target will be reached by the end of 2018 or early 2019. From a low of 8 to 9% women on ASX 200 boards a few years ago, we’re of striking range of that goal. The problem is the smaller end of the ASX 200 where female representation on boards is still in the single digits and there are still 11 companies that don’t have a woman on their board. 30% is the point at which you get critical mass and you start to change the conversation – it’s a step on the way to parity. It begins to breakdown the mindset of just a few years ago when everyone around the boardroom table was male and Anglo-Saxon – I find myself saying, ‘male, stale and pale’. Some will be critical off us for not aiming for parity, but this is a journey of inches and we have to make sure we bring our membership with us. – Elizabeth Proust
“What concerns me is that every year, we say the same thing: ‘we’re making progress’. The progress is glacial – we need to do more. We need to set aggressive targets – I don’t think 30% is nearly enough. We’ve set a 50% target with the Woolworths board with a 40% target to begin with. If we set the bar high, I think it sends a signal.” – Gordon Cairns
The prevailing status quo
“[The AICD] has written to the chairs of the ASX 200 companies with no women on their boards – or that have one – four times, occasionally without any response. We’ve received written and verbal comments about why people are happy with the status quo [including] ‘Women talk too much, don’t get to the heart of matters and lengthen board meetings’, ‘we would rather have someone known to the board already’ and ‘Women aren’t reliable enough to be long-term board members’.” – Elizabeth Proust
The role of sponsorship
“When you sit around the boardroom table to discuss filling a position, the first question is ‘who do you know?’ The ‘who do you know’ ends up being the usual suspects. Now, there are a lot of talent women who are coming to the end of their executive careers and want to step onto boards but they don’t know how and they don’t have the same networks as men. These woman need sponsors. The more they get sponsored the more successful they’re going to be. Sponsoring means for them to identify which boards they’d like to join, for the sponsor to then ask ‘who do you know there?’ or ‘who can I get you in touch with there?’, and for these women to be able to meet with the people on the boards so that when the question comes up – ‘who are the usual suspects?’ – they are in the fray, as opposed to out of the fray. Until we have men who are committed to sponsorship, at both the board and executive level, the progress will continue to be glacial.” – Gordon Cairns
