Crossing borders

AUSTRALIAN mining companies are ahead of the world in taking a broader look at their boards’ skill sets and identifying areas for improvement. However, if legislated quotas for gender diversity were introduced, they would find they still had a way to go. Brooke Showers explains
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Image courtesy of Xstrata Coal.

Brooke Showers

When Australian mining companies start to assess the skill components forming the framework of their boards, they often realise more can be done to improve the gender, experience and background diversity.

Once this realisation is made, miners have shown their willingness to address it.

Women on Boards, an organisation formed in 2006 to improve the gender balance on Australian boards has certainly noticed this. It has received more contact from small mining companies than any other Australian businesses in regards to finding women to fill board roles. More than 12,000 women from all sectors and industries are registered with Women on Boards and nearly 1000 women have been helped by the organisation to gain board positions.

Women on Boards provides courses and education for aspiring directors, through its pathways to directorship program, and finds directors for companies.

“We’ve noticed we have had enquiries from the Australian Securities Exchange 150 upwards listed companies requesting help to find suitable women for their boards,” Women on Boards executive director Claire Braund said.

This has been driven by pressure from shareholders and investors.

“The big focus is to improve corporate governance, but that involves the composition of the board to improve the general diversity,” Braund said.

“I think there is an understanding among the Australian mining sector that diverse skills sets, diverse backgrounds, diverse experience and diverse gender is a positive outcome.”

Many boards are beginning to question why their entire board is aged 50 to 60 years old and all have engineering degrees.

The idea of appointing people with skills in business, marketing or finance, for example, is becoming more attractive to break the mould and become more competitive.

Gender diversity is being pushed along by the increasing demand for skill set diversity to meet global business needs.

As companies experience a greater degree of exposure to the market, come under more public scrutiny and want to comply with ASX corporate governance guidelines, they have to start looking at board diversity.

This gender diversity is improving. The percentage of women on the boards of S&P/ASX200 companies has increased from 8.4% to 12.9% in the past two years.

However, there is still strong support for the legislation of gender quotas for publicly listed company boards to improve gender diversity.

Half of the 1086 senior staff who responded to a gender diversity on Australian boards survey conducted by Women on Boards last year supported gender quotas.

Woman on Boards chairwoman Ruth Medd said the level of support for legislated gender quotas was indicative of the continuing frustration among women in Australia about the slow pace of change in our boardrooms.

“We also need to remember that the ASX200 is only one story and the numbers have not changed for companies further down the ASX, superannuation bodies and credit unions, sporting organisations and across other sectors measured in our boardroom diversity index,” she said.

The survey revealed more than 70% of respondents believed in boards and committees of government entities and ASX-listed companies setting gender diversity targets at board level. However, support for legislated quotas was about 20% lower.

Medd said 48% of respondents agreed there had been greater attention paid to gender diversity in management and executive leadership teams in their organisations in the past two years.

“With only 58 per cent of women working in Australia and a gender pay gap of 17.2 per cent, the failure to use and reward all of our productive human capital is a major issue for business, the government and the economy,” she said.

“While we have not yet followed the Norwegian example and legislated for under-represented gender quotas on boards, it is clear from the survey that targets are supported.”

Women on Boards has set S&P/ASX200 companies a 25% target by 2012. It is writingto the chairs of S&P/ASX500 companies offering a database of appropriately experienced and credentialled women for their boards.

Braund remains an advocate for a quota system of women on boards.

“A whole lot of people don’t support quotas,” she said.

“But you know what? Unless you tell everyone to drive on the left hand side of the road, no one is going to do it voluntarily ... Unless you tell everyone you have to pay tax, no one is going to do it voluntarily.”

When the question of women becoming “token” members on boards to meet quotas is raised, Braund is quick to point out that quotas exist everywhere from shareholder representation to residents living in regional communities.

“You are not going to make it without meeting the selection criteria anyway,” Braund said.

Even though Australia is seen quite favourably in terms of what it has done in changing corporate guidelines and trying to drive some industry self-regulation, Women on Boards would like to see the bar lifted.

“I can no reason why the ASX200 can’t move to 25% by 2012,” Braund said.

“There’s plenty of women there.

“The longer companies delay and leave it, the stronger the push for quotas will become. It’s really beholden on industry to start doing something.”

As part of a Churchill Fellowship, Braund is researching gender target issues and public policy in the UK and assessing the impact of boardroom gender quotas introduced in Norway and France.

She was one of the 1400 people who attended the October Global Women’s Forum for the Economy and Society, held in Deauville, Normandy in France.

Forum participants discussed what was happening globally with women in the workforce against the backdrop of much larger issues and trends surrounding the economy. Representatives from 80 countries participated, including 40 women from Brazil and women from South Africa.

Surprisingly, given figures that show Australian women to be more assertive than those in other countries when addressing promotions and career opportunities, Braund was the sole Australian representative.

“Australian women are more than capable and Australian companies are ahead of the game with some of their policies,” she said.

Braund said Australia was really ahead of the game with some of the programs and policies being putting forward by listed companies.

In her view the nation is at the same level as, if not ahead of, what is going on globally across America, Europe and the UK.

Gender discussion in Australia has progressed to more boards on ASX-listed companies situated below the top 200 and to more private companies, superannuation companies and more sectors of the government.

Braund said Australian business on the whole was not scared of quotas.

The Australian banking sector is also leading the way compared to the conservative UK financial space, which appears opposed to any gender targets on boards.

Most European countries have a quota, and most will end up having a system, although Braund said the UK would not adopt a quota due to its dominant, conservative financial sector.

European Commission vice president Viviane Reding spoke at the French forum and said she was interested in mandating quotas for boards because it forced companies to do something.

Reding said the EU had given European companies time to get their businesses in order and if they had not done it yet, then she had the power to enforce a system that would do it for them.

The problem is Europe is facing bigger financial issues, which affects many of its policies.

France recently hit its gender diversity target of 25%. Interestingly, of more than half of the appointments to boards in France, two thirds have been foreign women.

The news is not so great for other western nations though. The French forum was told that the percentage of women in management positions in western countries was static or declining while countries such as Brazil, India, China and many of the African nations were presenting better opportunities.

“What did come out of the forum was the massive rise and the massive push of opportunities available to women in the emerging economies,” Braund said.

“There is a war for talent in emerging countries compared to the jobless recovery occupying the UK and US.”

This article first appeared in the February 2012 issue of Australia's Mining Monthly

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