‘Inherent insularity’: A persistent boys’ club is holding the startup ecosystem back
Tuesday, May 21, 2019/
Despite significant awareness being raised and resources being thrown at closing the gap, tech continues to be an industry dominated by men. In 2019, Australian women hold just 28% of roles and far fewer when it comes to leadership positions.
So why does this continue to be the case? Are too few women interested in the industry or are there just significant biases still prohibiting them from getting ahead?
According to a new white paper conducted by KPMG and Think & Grow, startup leaders are calling for better hiring processes, saying a persistent boys’ club holds the industry back and blocks women from getting a fair bite of the cherry.
Based on in-depth qualitative and quantitative research with more than 26 experienced startup board members and founders in the UK, Australia, US and New Zealand, the white paper explores best practice across the recruitment industry in those nations.
Worryingly, it found that 65% of startup boards don’t appoint members via a formal process, and instead source members through personal and professional networks, with limited use of professional recruiters.
Perhaps unsurprisingly then, 72% of all male-run startups had failed to appoint any women to their boards, while in Australia, that number was slightly reduced with 62% of startup boards sans women.
Most board members mentioned that suitable board members were typically sourced via the startup founder’s network, both professional (58%) and personal (27%).
Change appears far from afoot with 76% of startups failing to have any diversity targets or metrics in place.
“Although women-led businesses are one of the fastest growing segments of entrepreneurship, only 38% of startup boards in Australia have female members. This barely hits the diversity quota set by the Australian Institute of Directors in 2016,” head of KPMG Australia’s High Growth Ventures Amanda Price says.
Price adds that as a result of “boys’ club” culture, women are missing out on board positions because they lack experience in VC roles which they aren’t being referred for.
“Research shows that women are not being referred for board roles due to the lack of women in VC and investment roles. This is something VCs are working hard to change and it highlights how vital this is to facilitate a thriving and diverse ecosystem.”
If this trend continues and startups fail to address this under-representation of women adequately, the tech industry runs the risk of “insularity”, Price says.
“Diversity extends beyond skills and experience.
“As globalisation and the shifting demographics of markets and the workforce make startups more dependent on diversity, a board built on homogeneous relationships has the inherent risk of insularity.
“What we need to do to support Australian startups is to re-write the playbook by providing a guide and insight into what best practice should look like. As well as identifying ways to increase diversity, and set benchmarks for governance that enable founders to perform at their best,” she adds.
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