Should Australia follow NZ and mandate for the appointment of more women directors?
Having moved to ensure that half of all directors on its state sector boards and committees are women by 2021, the New Zealand government has hinted that it may force private businesses to appoint more women directors – currently comprising around 19 percent of listed company boards – if they don’t do so themselves.
Here in Australia, the latest figures released by the Australian Institute of Company Directors (AICD) put the representation of women in ASX-listed companies at around 28 percent, and the goal is to reach 30 percent by year’s end. AICD research suggests that when 30 percent female representation is reached, there are better outcomes for stakeholders and shareholders.
However, what remains unclear is whether instituting a form of reverse discrimination that the New Zealand government is proposing – that selects directors on gender and not purely on merit – is good for business or whether it puts equality between the sexes further at risk.
It’s important to note that while the move to increase the representation of women on local boards, and in the ranks of senior management is widely supported, Australia has managed to outperform its Kiwi counterparts without legislation that requires a certain number of women or other persons be employed.
Are affirmative action initiatives patronising to women?
Interestingly, the global pendulum is swinging away from reverse discrimination-type practises, with the White House abolishing affirmative actions that corrects unfair treatment of minorities, and give women equal opportunity in the future. In an attempt to encourage universities to drop their race or gender-conscious policies, The Trump Administration recently withdrew Obama-era guidelines on affirmative action.
But despite the common notion that affirmative action policies are no longer necessary and outdated, the latest Credit Suisse Gender 3000 report suggests a clear link between gender diversity in the boardroom and improved business performance.
Global initiatives to even the gender imbalance within boardrooms are far from new. For example, in 2003 Norway mandated that public companies allocate 40 percent of their board seats to women or risk dissolution, while Iceland, Spain and France have followed suit. Then there’s India which made it mandatory for all listed companies to have at least one woman on their board.
Nevertheless, quotas remain a contentious issue here in Australia, and according to ANZ chief executive Shayne Elliott, companies in crisis have promoted “old white men” and discarded their commitment to gender equality and diversity. The counter argument to quotas is that it actually stifles diversity of experience due to the same handful of women continuing to surface on multiple boards.
But without some form affirmative action, the World Economic Forum claims that advanced countries won’t see gender parity for another 100 years at least.
Groups like the Male Champions of Change (MCC) and Chief Executive Women were formed to hasten the advancement of Australian women into leadership positions. However, many women find the idea of a quota intensely patronising on the basis that talented women don’t need men to champion their cause.