Why Aren’t There More Women on Corporate Boards in Australia?

By Andrea Newell (Grand Rapids, Michigan)iStock_000002909264XSmall

In a previous article, we illustrated the positive impact that women can have on corporate boards, and how gender diversity on corporate boards translates into better business performance. While the number of women on corporate boards in the United States is still low, the representation of women on corporate boards in Australia is so dismal that Premier Anna Bligh called for Australian corporations to follow the example of the Australian government and set targets to increase the number of women on corporate boards.

The Australian government is determined to increase the proportion of women on government-appointed boards from 36 percent to 50 percent. The Australian corporate world is not only miles behind, the numbers have worsened in the last two years. The Equal Opportunity for Women in the Workplace Agency (EOWA) has taken a census of women in leadership roles since 2002.

A June 2009 article in Mondaq Business Briefing showed that in 2008, EOWA data illustrated that women are grossly underrepresented in the topmost leadership positions in ASX200 organizations. For example, only four Australian boards have women as chair (2 percent) and four companies have a female CEO (2 percent) and only 10.7 percent of executive managers are women and 8.3 are board directors (down from 12 percent and 8.7 percent respectively in 2006). Also, more than 50% percent of companies do not have any women board directors and 11.5 percent of boards have two or more women (down from 13.5 percent in 2006). And, a whopping 45.5 percent of companies have no women executive managers (down from 35.5 percent in 2006). The percentage of women board directors and executive managers in Australia is lower than in Canada, New Zealand, South Africa, UK, and the US. The author noted that: “Most notable was the finding that the number of women on boards and in executive management positions had declined since 2006, and in some cases reverted back to pre-2004 levels.”

Assessing and Overcoming Obstacles

Many factors seem to work against Australian women, including low numbers in higher education, a sexist culture, lack of opportunity for executive roles, women’s own attitude about their skills and abilities, a homogeneous corporate society, and the difficulty of breaking into the small, exclusive, top-echelon corporate board club, where many seats are held by only a few.

According to INTHEBLACK magazine (November 2008), although MBAs are expected for those who want to crack the glass ceiling into ASX200 board seats, business schools have consistently had a difficult time attracting women MBA students. Professor Chris Adam, associate dean of postgraduate programs at the University of South Wales Australian School of Business, has struggled with this issue since he arrived at the university 30 years ago. In that time, the numbers of women MBA students has remained nearly the same – about 15 to 20 percent. Deterrents include a distaste for a male-oriented environment, the perception of the inevitability that businesses are run by and for men, the fact that the prime years to pursue an MBA often coincide with child-bearing years, and the lack of strong female business role models.

In the Sunday Star Times (November 2007), Tim Hunter calls the Australian culture “famously sexist.” Although in his column, he laments the lack of women on corporate boards in New Zealand, the 2008 EOWA study puts Australia below New Zealand, so while New Zealand has begun to remedy its low numbers, Australia’s numbers have not improved, and indeed have worsened.

The EOWA census also showed that the “representation of women in the workforce diminishes as seniority increases. While women in the workforce are nearly equally represented compared to men (44.9 percent) at senior levels, women become increasingly more isolated until, at board director level, there are over 10 men for every woman.” Very few women are achieving the high-level roles and experience they need to qualify for an ASX200 board seat.

Part of the problem is women themselves. Many of the women who have the seniority and experience to make it to the board are members of the baby boomer generation. Marilyn Forsythe, National President of Business and Professional Women Australia, believes this is a major factor in why there are so few women on corporate boards. “Baby boomer women have a culture of courtesy, politeness, and modesty. Women have to stop being so modest about their skills and start applying for positions on boards to gain experience.”

Although she doesn’t believe that being a woman has held her back professionally in any way, Rhondalynn Korolak, Managing Director of Imagineering Unlimited, had difficulty finding work when she first came to Australia. With degrees in law, accounting, and hypnotherapy, the explanation she was given for not being hired was that she didn’t have “Australian experience.” She has also applied for and been turned down for multiple board positions, although she has held board positions overseas. The message she was getting was that diversity is not welcome. “It seems to me that the biggest thing holding Australian businesses back is the “me too” syndrome. I do not consider this merely a sexist thing. There is an ingrained corporate culture that says they want to hire others that are “like them.” So if your management team or board of directors is made up largely of white, middle-aged Australian men, then that is what they tend to be more comfortable with hiring,” Korolak said.

The EOWA numbers are discouraging enough, but take into consideration the fact that those numbers are not a one-to-one relationship, and they sink to a new low. The few women who do manage to break into the corporate board club usually hold more than one board seat, so the actual number of women holding board seats is even less.

What will bring about change?

Study after study shows that having women on corporate boards is only beneficial to companies, and having three or more women can change the entire dynamic of the board. “Women are generally evaluators of issues where men are reactors, and this should ensure that more sound governance decisions are made at board level,” Forsythe said. Women are employees and consumers, and make the majority of the buying decisions in their households. This is a demographic that businesses, Australian or otherwise, cannot afford to ignore.

Is setting mandatory targets, as suggested by Bligh, the way to pry open the boardroom door? Women come down on both sides of the issue. Korolak and Diane Smith-Gander, who holds three NED (Non-Executive Director) board seats, are against corporate board quotas, while Forsythe and Elizabeth Broderick, the Federal Sex Discrimination Commissioner, believe that government intervention is crucial to stir the stagnant corporate board waters and turn the tide toward gender equality.

Forsythe and Smith-Gander are like-minded on other approaches to boosting women into board seats. One is to promote corporate responsibility for encouraging women to work toward gaining the experience needed for a corporate board seat. “While there are some areas where I believe quotas can be very helpful in building an experience base for women and other minorities (in corporations) to use as the foundation for broader opportunities, I do not believe the boardroom of large corporations is the place to apply a quota. It is on the building of the skill set that leads to the board seat that any positive discrimination should focus,” Smith-Gander said. Forsythe added, “Companies must invest time and money in sending women to courses such as the Responsibilities of Being a Board Member and Negotiation Skills.”

Another route to the ASX200 boardroom is through board service in non-ASX200 companies. Forsythe encourages women to start building their board portfolio in smaller, local companies. “Most states have a website where women can register for boards and this experience will give them the qualifications and empowerment to apply at the senior corporate level.” Smith-Gander holds three NED board seats (Director Wesfarmers Limited, Director NBNCo Limited, and Director Basketball Australia). “Building a portfolio career as an NED naturally leads to multiple boards. While I am early in my career as an NED, I am already finding that there are lessons and experiences I can leverage across all the boards I sit on.”

What all the women do agree on, however, is that board seats should be gained on merit, and not as a token gesture. Forsythe asserts that there are not only women out there currently who are supremely qualified for a corporate board seat, but the next generations of women board members are moving up fast. “Now look at Gen X and Y. They change jobs like they change their hairstyles, they are better educated than other generations of women and when they want it they want it now. More and more young women are graduating in traditional male jobs, and they own small businesses. If we give them a portal into board membership, they will grab it and be great at it.”

If all else fails, a force beyond sexism, beyond homogeneity, and unconcerned with government interference might instigate change all on its own. If the headlines have illustrated anything in the last year, it’s that the economy is weeding out companies that can’t or won’t adapt to the new global economic reality. Moving into the future, corporate boards that continue to disregard half their employees and consumers – do so at their own risk.

Korolak concluded, “A change in global financial circumstances and a demand for innovation, improved customer service and sophistication in products may create more PULL to get women into senior leadership positions than any federal legislation designed to PUSH us in there.”