Women filled 35.3% of Federal Government board positions last financial year, an all-time high, according to the annual Gender Balance on Australian Government Boards report released this month.
By comparison, the percentage of women on boards among the ASX top-200 was 10.9%.
Looking on the bright side, the government’s achievement is great news for those of us who believe that improving the gender balance at the highest levels of all organisations improves their performance – a conclusion that I have come to not solely from personal conviction and experience but from reading substantial research on this subject. The consulting company, McKinsey, has been a leader in this research, producing four substantial reports since 2007.
For leading companies, there are some valuable insights to be gained from the government’s announcement.
Perhaps the simplest – and the oldest – is that things that get measured get fixed.
Companies have argued against the idea of governments, stock exchanges or regulators imposing quotas. A simple alternative that leading companies can undertake is to start measuring and reporting on the issue of gender diversity.
This type of report needs to cover diversity and equality from a company’s youngest and most junior staff, through to its executive ranks.
The measures that would be useful – I will explain why – and published as collective data so as to protect individual privacy could include comparing:
- starting salaries
- gender ratios by new appointments
- the pay gap between men and women as raw numbers
- the length of time between promotions
- candidates for promotions
- gender ratios by rank at every level
- gender ratios in C-suite positions
- gender ratios by operational versus advisory positions
- gender ratios of staff to executives
- changes to any of these measures over time – for better or worse
One reason that companies are struggling to get women onto their boards is because they do not have enough women in operational executive roles from which to choose candidates.
The research by McKinsey and others shows that women arrive in the workplace with exactly the same ambitions and education as men. It is their experience of systemic barriers and hurdles that results in the lack of women in executive ranks.
Take the simplest example. A woman at the age of 27, deciding to have a child, will compare her salary to that of her partner. If it is lower, she will be the one who becomes the primary caregiver. What other rational choice does that couple have?
The government has a target of 40% representation of women on government boards (there are 450 of them) by 2015.
The report takes the trouble to break down the gender ratios by portfolio. Not surprisingly, perhaps, the Department of Prime Minister and Cabinet is a shining example, with a ratio of 45% woman and 55% men.
The companies that start to honestly report about the realities of their organisation as far as gender equality is concerned will be the leading companies.