Research is increasingly showing that greater gender diversity in organisations can boost performance, yet women remain underrepresented on Australian boards. While women make up 45 per cent of our workforce, they hold only 10.9 per cent of positions on ASX 200 boards, according to Women on Boards, and 87 ASX companies still do not have a woman on their board.
That said, things are improving. In 2008, women comprised only 8.3 per cent of ASX 200 boards. By the end of 2010, 57 women had been appointed to these boards, compared to only 10 for the whole of 2009. So we are heading in the right direction. For ASX 100 companies, this figure has reached 14.1 per cent, while women make up 16.5 per cent of ASX 50 directors. However, as of June 2010, just 4.3 per cent of board seats on the ASX 201 to 300 companies were occupied by women. This figure remains unchanged.
I have served on a number of boards in varying capacities and thrived on all the experiences. I was a director and audit committee member of the Cultural Facilities Corporation and ACTTAB, and a director of the National Press Club. I was also a volunteer director on the Gift of Life and Our Wellness community boards. I believe that diversity creates innovation and that groupthink stifles it. We need not only more women on boards but a more linguistically and culturally diverse make-up of boards.
I have witnessed firsthand the value of a diverse board. The traditional—yes, white Anglo-Saxon— male board members do see the tangible benefits of a board whose perspective is broadened and enhanced. Some have argued that diversity on a board adds to the bottom line and increases shareholder value. While the jury is still out on that one, there seems to be little doubt that board diversity adds to innovation and the ability to create new ideas.
The government’s policy is that we have a target for government boards of 40 per cent, which we are working our way towards. At the same time, the government is strenuously urging the private sector to act to get more women on boards. Shining a spotlight on performance, through vehicles such as Women on Boards, improves transparency and generates action, if the ASX 200 figures are anything to go by.
I commend the government on its initiatives and its determination to see this imbalance addressed. In a joint initiative between the government and the Australian Institute of Company Directors, the institute now offers 70 scholarships that give Australian women the skills they need to become directors or chairs. More than 1,900 women from across the country applied for the program, so women are clearly ready, willing and able to serve. The scholarships were awarded to high-performing board-ready women, giving them the opportunity to attend a range of courses for free. I have done a number of these courses and found them invaluable.
New requirements introduced by the ASX Corporate Governance Council and programs introduced by the AICD and other business groups are starting to have an impact in terms of the number of women on ASX 200 boards. In addition, the AICD has recommended that listed company boards identify diversity goals over a given time frame and report on progress on both board appointments and executive management.
I believe we need to see a self-motivated change from Australian companies. I believe that the nation’s companies want to lift female board representation and I believe that business leaders are on the side of reform. Earlier this month on International Women’s Day the Prime Minister said she believes that men and women are born with equal capacities. When you see an area of life like boards in corporate Australia with a disproportionate representation of men, you have to start wondering whether selection really is merit based.
As the Prime Minister said, something is stopping Australian women getting through and Australian businesses need to address that. Businesses should be looking to get more women on boards. They should be looking to harness female talent and they should be looking to assist women to get the skills they need to participate on boards.
I believe the responsibility not only lies with government and business. I encourage women to become board ready, to learn the skills that a board director needs, especially those concerned with reading and interpreting financial statements, and being empowered to challenge decisions and ask questions. A good non-threatening start is by becoming a volunteer director on a community organisation or by joining the P&C.