Yesterday the ASX released an independent report by KPMG that found from a sample of 211 listed companies, 61% of them (129) had an established diversity policy.
Of these 129 companies, 76 (59%) had established measurable objectives for gender diversity.
From January 2011, the ASX has required all listed companies to adhere to rules aimed at addressing gender diversity within leadership ranks. If companies don’t meet these, they have to provide a reason to the ASX (the ‘if not, why not’ clause).
Listed companies are now expected to establish a diversity policy (of which a summary should be publically disclosed and which includes “measurable objectives for achieving gender diversity”), as well as to disclose the number of women employees in their organisation, including in senior ranks.
This means companies have to monitor and report on their gender diversity. It doesn’t directly do anything about gender diversity in leadership roles, but it is a start. Business strategists have long known that you can’t fix something you don’t measure.
When it came to those without diversity policies, the most common reason given in the KPMG report was their “size and stage”. The report also noted there was a direct, positive correlation between the size of a company and the adoption of a diversity policy. That is, the bigger a company is, the more likely it is to establish formal policies around diversity.
The ASX has welcomed the findings, saying they show the effectiveness of its diversity recommendations. “Introducing diversity into the recommendations has resulted in a significant number of listed companies choosing to incorporate diversity measures into their governance practices,” said Kevin Lewis, the ASX’s chief compliance officer.
There is evidence of a marked increase since the January 2011 in the number of companies asking for women to be included on shortlists, at least anecdotally. It’s been the experience of Kate Thomas, the head of client engagement (Australia and Asia) at Ambition Group, a global recruitment business.
“Introducing flexibility in the workplace has certainly become very topical, and some organisations are now willing to amend their work schedules to accommodate certain females to take on certain roles,” she told LeadingCompany today.
This is welcome news as Australia is often seen as lagging behind other countries when it comes to such flexibility, she says.
Why a diversity policy
The KPMG report focused specifically on diversity policies, seeing them as a key aspect of getting women into leadership positions.
One of the key benefits of having a formal diversity policy is its visibility, explains Thomas. “It shows the organisation you work for accepts that a one-size-fits-all approach isn’t necessarily the best way.”
She adds that clarity of information, as included in formal policies, is important to women’s advancement in a workplace. It’s a sentiment that was recently echoed by a meta-analysis of existing studies conducted by the Melbourne Business School.
The project, which looked at the findings of 103 different studies, found the existence of formal personnel practices was an important indicator of the level of female leadership in an organisation.
What’s in a diversity policy?
The Institute of Company Directors has published guidance on how companies should approach diversity policies.
It recommends two main points:
- Set firm diversity targets and reporting mechanisms.
- Codify all the initiatives and programs a company currently has in place to foster an environment open to diversity.
Thomas says it’s important that diversity policies don’t just focus on women in leadership positions, but take a broader view of how organisations can be good places to work for a diverse range of people.
“It shouldn’t be seen as a ‘female policy’,” she says. “It’s a workplace policy around fairness. It creates a motivation among staff to work for you.”
She says while motherhood is a biological part of being female, it isn’t just a female issue. “There should be fairness with respect to flexibility in the workplace for both men and women to address their family responsibilities,” she says.
Is there such a thing as too small a company?
Close to four in 10 ASX-listed companies surveyed by KPMG said they did not have diversity policies as it was not appropriate for the size and stage of their business.
The ASX requires such corporations to state why they do not have a formal policy, but does not require all listed entities to have one. Many of the companies listed on the ASX are small, speculative resources companies, which often do not hire more than a handful of employees.
Thomas says it’s beneficial for all organisations, regardless of size, to have an awareness of diversity in their organisations.
“It’s a process that promotes inclusion, and can lead to great motivational levels within an organisation,” she says.
“Regardless of whether you’re an organisation of 10 or 10,000 staff, working together on a project addressing diversity can only be a positive thing. It doesn’t have to be a costly exercise.”