What is wrong with the boards of big business? Their competence in running companies is put in question by their poor record in selecting senior line managers and new board members.
Two reports today cast serious doubts on the talents of the current incumbents because of the dearth of senior women.
Apparently they cannot recognise talent, as the Australian Institute of Company Directors (AICD) report today showed that a threat of quotas was necessary to stimulate a substantial but belated rise in the appointment of women to the top ASX 200.
There were 40 new female appointments so far this year compared to 10 for the whole of last year. Women make up 10% of directors, up from just over 8% last year. Should we celebrate? No, because the six female chairs and 10 chief executives in this group cast serious doubts on the effectiveness of recruitment practices of said firms.
It is 40 years since the Female Eunuch and almost 30 since the 1980s when remedies were put in place to counter the long-term discrimination against women. There were arguments that time was needed for change to allow women to move up in firms and gain the necessary experience but this excuse is a little lame after this time lag. Why then are there now so few?
One can only assume that boards, along with many other powerful institutions suffer from a mix of groupthink and a desire to reproduce themselves. If a threat quadrupled a small number of appointments in a very short time, one can only assume that it was not a lack of candidates, even on current limited assumptions. It is these viewpoints that need to be questioned because I do not believe there are so few women candidates who could contribute effectively to boards.
The proposed remedies reinforce my concerns. Mentors and AICD scholarships, as a way of increasing numbers, are indications of the problem, not solutions. Mentors are useful to ensure potential board members have advocates in the system. However, the “need” to set them up formally reinforces the view that being appointed is based on who you know and how you fit in. Obviously, few women have so far made it across the powerful male perception thresholds of current incumbents, which suggest we should question their judgement of candidates.
Scholarships on offer suggest again the deficits are in the women striving for boards, not the competence of the selectors. Presumably the mix of extra training and some formal mentoring will ensure that the women will be vetted and counselled to ensure that they will not bring to the table any inappropriate ideas. This will mean that the women in the system will primarily be judged on how well they fit the current models and prejudices, not on whether they can bring in any new or exciting perspectives. Any perceived feminist tendencies and possible change desires will be firmly excluded, so the status quo of a masculine model of leadership continues despite often not serving either business or the society very well.
The gender divides are also reflected in the EOWA survey with only 4% of women in the powerful line manager positions. Lots are in human resources, which is not the way to the board. Why is financial experience so much more valued than managing human resources? Australia lags well behind comparable other OECD levels of female senior management, suggesting again that Australian businesses are not making use of the optimum skills and ideas on offer. The prejudices and limited assumptions of our major boards should send out serious questions to investors and shareholders
What is needed rather than mentoring and training women for board positions, is board members to recognise the equally high levels of skills and competences that comes in female forms. Any takers?
Without wanting to seem contrary, why do we always assume gender is the only valid measure of diversity in corporate boards?
If we want our “Australian businesses to make use of the optimum skills and ideas on offer” why do we immediately discuss hiring more women?
While I readily accept that women and men do think quite differently, surely there’s a greater case for widening the diversity net to include race, location, professional and life experience, generation, and any other we can think of?
In these days of gender equity in education and (at least) entry level professional experience, the world views of male and female RMIT-trained law or accounting graduates will be fairly similar.
David Donohue GAICD AFAIM
So why not appoint the best candidates regardless of gender, which should be at least 50/50n and women can be found in different ethnic groups, locations etc as well. Your assumption that men and women think quite differently would seem to indicate the source of some of the problems of those with initials after their names.
If you believe women and men do not think or react differently, and assert that we should be only hiring the best candidate – why does that mean half of all hirings should be women?
Seems a circular argument.
My comment is that diversity isn’t only gender based, and that to assert it is smacks of affirmative action which in itself implies that women are somehow lesser than men – a notion I firmly reject.
I’ll leave out the post-nominals this time.