As of 30 June 2010 the Australian Securities Exchange (ASX) now requires Australian companies to develop a diversity policy, set measurable objects to increase gender diversity and report on outcomes. Companies will be required to either adopt the recommendations by 1 January 2011 or explain in their annual report why they have not done so.

Welcoming the new proposals, the Federal Sex Discrimination Commissioner Elizabeth Broderick stated "We need systemic reform, we need a real jolt to the system," and "The ASX guidelines are a good first step that I'm really hopeful will change the picture in Australia, but we need to be clear this is a call to business to step up and take responsibility and work to fix the problem.

"According to the 2008 EOWA Australian Census of Women in Leadership, the proportion of women to men on corporate boards and in executive leadership roles is in decline. Australia now trails the USA (15%), UK (11%), South Africa  (14.3%), Canada (13%) and New Zealand (8.7%), where it was once ranked second behind the USA.

The proportion of women on the boards of the top European companies has grown to 12% in 2010 from 8% in 2004.

Of a total of 4,875 European board seats, women occupy 571. As a result of quota legislation Norway remains at the top of the table in having 37.9% women on boards (still less than the 40% required by the legislation). Portugal, Italy, Greece, Spain, Sweden, Belgium and France have more than doubled the number of women on boards; the introduction of Corporate Governance Codes together with equal access legislations currently under discussion in a few countries (Norway, Sweden, Spain, France) is having a significant impact, as well as increased shareholder and media scrutiny of board membership.

Since the amendment in December 2009, there has been a focus on female directors. Between December 2009 and October 2010, 40 women were appointed by to the boards of  ASX 200 companies, compared to only 11 for the whole of 2009. 

However, according to a study by the Australian Council of Super Investors (ACSI), although the number of directorships held by women increased last year, most new roles were distributed among women who already held board positions.

"The increase this year in the appointments of women to boards is encouraging, but the numbers remain tiny. Almost half of the 40 new appointments are extra directorships for very able women already sitting on ASX 200 boards," ACSI president Michael O'Sullivan said.

"There is a danger that high-performing women directors will become overloaded, as companies seek to recruit senior and experienced directors rather than tap new talent," he said.

In December 2009 there were 105 companies in the ASX 200 without a female director. Although this fell to 101 by June 2010, it shows that the serial poor performers still have a lot of work to do.

As of June 2010, just 4.3 per cent of board seats on ASX 200-300 companies were occupied by women. Of the 553 directors, 24 are women. Of these women, 15 hold directorships in ASX 300 but not ASX 200 companies indicating that the ASX 300 is a limited ground for development of ASX 200 directors. US research has shown that to enhance strategic decisions, board membership should reflect the corporation's consumer population. Thus, women are a critical but overlooked resource.

In a presentation to the AGM of the Chamber of Minerals & Energy WA 15 April 2010, Erica Smyth, Chair at Toro Energy asked the question, “What if we invested some of the money needed to relocate and support expats into supporting our own professional women?” She further intimated, “So what about our industry? We have professional labour shortages staring us in the face. We have less than 8.3% women on our top 200 boards in Australia and probably a lot less on small to medium resource boards. As for non-Anglo Saxon men even less. We are now planning to import expats from other countries when there are many women who have either left the industry or are under utilised in their current roles.”

So, if there's no shortage of educated, highly skilled and experienced female professionals in Australia, is this an issue? Why is it an issue? And how can we change it? All questions for the asking.

The most frequent excuse both to justify the absence of women in powerful positions and to say ‘no’ to any kind of affirmative action is ‘there are not enough qualified women’.

The case for more women on boards and executive level positions is both symbolic and economically rational. Women make up over 51 percent of the Australian population and 63 percent of all university graduates.  Women constitute 58.7 percent of the total workforce in Australia yet they remain under-represented in leadership and decision-making positions in corporate Australia.   

In November 2009 Goldman Sachs JBWere released a research report on female participation in the workforce. Entitled 'Australia's Hidden Resource: The Economic Case For Increasing Female Participation', the report concluded that closing the gap between male and female employment in Australia would boost the level of GDP by 11% and solve the looming fiscal burden of the ageing population. The same report found that Females represent 50.2% of the Australian population and 45.7% of the workforce and that females earn 89% of males' income on an average hourly rate and full-time earnings basis. 

The report argued that with more women on boards there's a good chance ‘better decisions may be reached’ and that ‘mentoring and visibility of females would encourage a lift in female participation in general and a more even distribution of females across the workforce.’ 

The strategy to achieve higher levels of women in leadership roles throughout Australia has to be driven from the top – something that has already been recognized by the likes of the Business Council of Australia (BCA).  

In March this year, BCA President Graham Bradley announced the establishment of the ‘C-Suite’ Project, a pilot scheme in which leading CEOs who are BCA members will personally mentor high-achieving women employed by other BCA member companies. The initiative will identify talented women and open up pathways for them to rise to the top of the corporate ladder. The 12-month pilot, conducted in partnership with the Australian Human Resources Institute (AHRI), provides a model for other businesses to follow. 

Directors, CEOs and senior executives across all ASX companies have a responsibility to ensure that they are at the forefront of policy and changes. 

Claire Braund of Women on Boards (WOB) adds, “Leaders have obligations to shareholders and society to ensure that their organisations are the best they can be. This does not mean ignoring half the talent.” She points out that the public sector in Australia has women making up 37% of its board memberships, suggesting that has probably come about due to the broad range of boards and advisory councils at state and Federal level, which tap into the talents of a larger pool of the population. 

There is now an opportunity for organisations, especially in the natural resources sector, to be seen as a champion of change in this area. We have a gender diverse consumer base,  we have a wealth of untapped talent and we have regulatory change that facilitates best practice in gender diversity – why not be the leading sector in recognizing and rewarding talent? We can only benefit.  

Sources:

1. ASX Corporate Governance Council
2. Equal Opportunity for Women in the Workplace (EOWA)
3. Australian Human Rights Commission
4. Chamber of Minerals & Energy WA
5. Toro Energy
6. Goldman Sachs JBWere
7. Business Council of Australia (BCA)
8. Women on Boards
9. Fourth Bi-annual EuropeanPWN BoardWomen Monitor 2010
10. AICD Boardroom Report
11. Investor Daily - Wouter Klijn
 12 Oct 2010
12. Greens Policy Initiatve13.    USA Journal of Business Ethics