Femeconomy’s approval criteria is aligned to the Australian Institute of Company Directors (AICD) target of 30% women on boards by 2018. We asked Rhian Richardson, AICD’s Board Diversity Manager to share with us the advocacy role, progress and strategies currently undertaken by the AICD to achieve this goal.
Championing greater gender diversity on Australian boards doesn’t hurt diversity in other areas of business. But it can provide a roadmap of how to achieve it.
The AICD has been actively involved in increasing the number of women on boards since 2010. Our initial diversity programs were focused on providing women access to education and senior directors to assist them in developing the requisite boardroom knowledge and skills. Professional development and director education are crucial in ensuring directors possess the confidence and ability to contribute at the highest levels.
In 2014, when the number of women being appointed to ASX 200 boards had stalled, we decided to broaden our focus to encompass a more holistic approach. We renewed our advocacy efforts, approaching ASX 200 Chairs, transparently tracking and reporting ASX board data and increased our media engagement. Our main policy initiative was calling for a national numerical target for female board representation and a specified timeframe for the ASX 200 to achieve it.
In April 2015 the AICD called for all boards, with particular emphasis on ASX 200 companies, to meet a target of 30% female directors by the end of 2018.
A month later the Australian chapter of the 30% Club launched. The 30% Club is a global movement that brings together the investor community, executive search consultants, senior directors and educators to ensure that change happens at all levels and is seen as an important contributor to board effectiveness. The AICD is the current executive of the Australian 30% Club.
The 30% Club and the AICD work together to support companies to achieve the 30% target and improve gender diversity in Australian boardrooms. At the current new monthly appointment rate of 40%, the target for ASX 200 companies will be met and exceeded by the end of 2018. ASX 200 boards currently comprise of 25.3% female directors (31 December 2016). This is a significant increase from 8.3% female representation in 2009.
There are often comparisons made between the positive progress happening in the board space and the glacial change occurring in the executive space.
Questions are raised as to how much time we should be devoting to increasing women’s representation on boards, particularly when the board space is far smaller in terms of numbers and the type of individuals contributing than the executive. Momentum in board appointments is there. However, the executive space is in need of more active intervention and is worthy of the significant attention and resources that are currently dedicated to women’s board representation.
The lack of women in the senior executive space is definitely concerning, particularly as women are graduating in higher numbers from universities and entering the workforce in equal numbers to men, except in some male-dominated industries. The focus on women on boards should not detract from the difficult task of increasing women in senior executive roles. We see them as complementary; ultimately the focus is on ensuring women’s voices are heard in leadership positions and that women have access to the same opportunities as their male colleagues.
In conversations we have had with ASX 200 Chairs, each articulated the importance that the board reflect the structure and culture of their organisations and also be an example of what their organisations should strive to achieve.
Boards are perceived to be role models for women within the organisation when there are higher numbers of female directors. Many female directors are actively engaged in initiatives to promote women within their organisations, such as speaking at internal events and training, mentoring senior executives or coaching female employees before and after board meetings. Female employees believe opportunities will be available to them when they see women in board positions in their organisations.
Although some international studies have demonstrated that higher numbers of women on the board does not translate to higher numbers of women working within the organisation, particularly the executive ranks, I think it is too early to draw conclusions from this type of research. A variety of entrenched social and organisational structures contribute to women’s reduced workforce participation. Male-dominated industries have their own particular challenges, many of them relating to conscious and unconscious bias against female employees. These issues are not easily solved and involve a whole of organisation approach, not just the commitment or intervention of a few non-executive directors.
When there are significant numbers of women on boards across all sectors and industries, then we can conduct a proper analysis into whether higher numbers of women on boards increases the numbers of women within the executive ranks. If we still do not make progress then boards will need to engage in some honest self-reflection as to what they believe their role is in fostering inclusive and diverse workplaces with positive cultures. These conversations are already happening in boards that believe in the benefits of diversity and those boards are witnessing the positive benefits.
There are also many fantastic advocates, both male and female non-executive directors, willing to put their faces and names to the cause.
Without their commitment and persistent challenging of the status quo, we would not be at 25.3% of women on ASX 200 boards today. They have at different times of their careers expressed the unpopular or uncomfortable point of view, sometimes at risk of their own progress. Hopefully the number of advocates has reached the tipping point which enables others to feel like they can speak up and question inequality or inefficiency when they experience or witness it.
We are positive about the progress that has been made and the support the AICD and 30% Club has received from both male and female non-executive directors and executives. Rather than assessing some diversity areas or initiatives as more worthy of attention than others, we encourage more diverse voices to contribute to this space and fight for women to be represented equally in leadership positions across the spectrum.
The Australian Institute of Company Directors (AICD) is a membership organisation for directors committed to excellence in governance. We positively contribute to society and the economy through governance education, director development and advocacy. Our membership of more than 39,000 includes directors and senior leaders from business, government and the not-for-profit (NFP) sectors.
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