It feels as though barely a week goes by without a conference somewhere in Australia focused on the woeful representation of women in leadership. The glacial pace of change has seen quotas proposed as a solution by many impatient with the poor progress to date.
Inaction on gender equality in organisations is not an option. However, mandated quotas are not the silver bullet to solve this complex issue, which has its roots in the lack of women on the pathway to senior leadership in the first place.
While there’s no denying women remain under-represented at board tables across Australia, the Workplace Gender Equality Agency’s 2012 Australian Census of Women in Leadership found an improvement in the number of female directors. The area where progress has stalled – which demands our immediate focus – is the executive ranks.
With women comprising less than one in 10 executives of ASX 500 companies, Australia lags well behind other countries with similar systems of corporate governance including the US, Canada, New Zealand and South Africa. Our census showed almost two-thirds of companies in the ASX 500 have no women in executive management positions and female executive managers are more likely to be in support roles, such as head of human resources or legal, rather than line roles such as chief operating officer or chief financial officer. In fact, women’s representation in line management positions in ASX 500 companies is a mere 6.2 per cent. A critical pathway to board and chief executive positions is through line management so we must focus on attracting more women into these roles.
The unique managerial structures and definitions within organisations mean setting mandatory quotas to address the poor representation of women in executive positions presents practical challenges. Overseas experience has shown quotas at board level don’t necessarily encourage a widening of the talent pool. For example, Norway’s quota of 40 per cent female directors has resulted in the ”golden skirts” (a group of prominent women who hold multiple board directorships) and has been criticised for failing to significantly increase the number of women set up to replace them.
Voluntary targets are the sensible alternative to increase representation in senior roles.
There is nothing radical about targets. Indeed, setting targets is an essential part of managing business performance. Gender targets operate in the same way – by setting objectives around a key management area of focus.
Unlike quotas, voluntary targets allow employers to set their own goals across their organisation, based on what is realistic for their industry and their circumstances. Targets can be set for a particular level, for example graduates or senior managers, or for specific business units.
Organisations are already encouraged to set voluntary targets, through initiatives such as the ASX Corporate Governance Council’s diversity recommendations and the new Workplace Gender Equality Act. These external pressure points appear to be working. A report on the implementation of diversity recommendations found that 82 per cent of ASX 200 companies had set measurable objectives for gender diversity. The report noted that organisations that reported numerical gender diversity targets were best able to demonstrate progress.
Momentum for target setting will likely increase from next year, when organisations with 100 or more staff will have to report to the Workplace Gender Equality Agency on the gender composition of their workforces, and the existence of any strategies or policies to support gender equality. These reports will be publicly available.
Using this reporting data, the agency, in consultation with employers, will develop industry specific benchmarks allowing organisations to compare their gender equality progress against their industry peers and to track their progress over time.
The Workplace Gender Equality Agency will soon launch a tool and guidelines on how to set voluntary targets. These tools, coupled with the industry specific benchmarks, will ensure organisations aren’t playing darts in the dark when it comes to setting targets.
There is considerable evidence showing a positive correlation between gender diversity and organisational performance. Progress needs to be driven from the top by leaders who understand these issues and commit to change.
I say to organisations that are yet to set targets: it is time to start the journey.
Helen Conway is director of the Workplace Gender Equality Agency