Tapping on that Glass Ceiling
5 January 2017
Women are great for business, but clubs are behind other industries when it comes to gender diversity on boards.
The following article is written by Debbie Organ, ClubsNSW Learning and Development Executive and while her experiences and statistics are Australian based they mirror the current situation in New Zealand and give some great insights and perspectives on diversity today.
Recently a group of future club leaders asked me if I had ever experienced discrimination during my career because of my gender. The conversation was that these women had sometimes felt intimidated, but that training and increased knowledge had empowered them to challenge the status quo in their clubs. It was not the first time I have been asked about this issue.
Diversity on boards, particularly women on boards, is a hot topic in Australia and globally. Irrespective of your view on whether organisations should have diversity quotas or targets, the underlying issue remains: Do we need a strategy for promoting women into leadership roles? Are we still stuck in the bubble of hiring the best man for the job rather than the best person, irrespective of gender, ethnicity, culture, age, sexual orientation or disability? While diversity is multifaceted, this article focuses on gender.
A Personal Perspective
As a university-educated women who began her career in male-dominated corporate banking in the 80s, I can safely say that the status of women in the workplace is better than it used to be. Awareness, open discussion, education and legislation have improved the work environment for women in the workforce and on boards. My career in banking was a positive one, but various incidents stand out an I have spoken about these publicly in the past. It was a different time in the 80s and 90s and I, and generations of women before me, could tell stories that today's business women could not imagine.
Once incident sticks out and is still discussed at various bank reunion functions. One being promoted to a manager in corporate banking, I spent my hard earned pennies on a flash corporate pantsuit. On a day that I was to represent the bank at a $500 million syndicate meeting with other Australian banks, I arrived at work feeling confident in my ability and dressed for success. That confidence was soon tested when I was told to go home and get changed because "a women belongs in a dress". At first I though he was joking, but it quickly became apparent that my promotion would have challenges over and above anything to do with my management, banking or credit skills.
The issue of the pantsuit when to the highest levels of the bank. The managing director was advised and I was called to a meeting with the senior manager and general manager of corporate banking, with a resolution that I would be permitted to wear a pantsuit on Fridays. It was suggested to me that failure to comply with this archaic ruling would result in a transfer from what many considered the elite section of the bank. To hold my position I agreed to disagree, and wore a pantsuit every Friday for the remainder of my career with the bank, as did many women who followed in my wake (although to add insult to injury, I was often required to inform new female managers that this was a requirement).
In hindsight, the most extreme case for me was trying to conceal my pregnancy during a time when receiving a redundancy notice in the mail during maternity leave was commonplace. I was about six months pregnant when I finally told senior management I was expecting. The immediate response was, "That's a surprise, I thought you wanted a career in the bank." To protect my career, I attended a meeting the afternoon my son was born and never took maternity leave. A promotion I had already been given was withdrawn, and when I questioned the decision I was told that the bank could not ensure that my brain before the baby would be as good after the baby. I was the most senior woman in the bank and when I left and while the environment for women to succeed is much better now, there is still a long was to go to achieve equality.
My association with the NSW club industry dates back some 21 years and it is fair to day that the industry is male-dominated, although it is changing. Perhaps my banking experience has prepared me more than others to work in this industry, which I have grown to love. There is, however still and element of "this is how it has always been in the industry", and how it has always been is men dominating the management and boards of clubs.
Prior to joining ClubsNSW, I was approached by the chairman of a well-known club to consider taking a casual vacancy on the club's board. The club was experiencing financial difficulties and the chairman thought my financial and procurement skill set was needed for its survival. On reviewing the club's financial position, despite my reservations regarding the enormity of the risk and the time required to steer this club back on track, I agreed to accept the position. About a week later I met with the chairman and was advised that the board had rejected my appointment on two grounds: 1) that I was a women ('good observation', I thought at the time), and 2) that I would want to change things. The required skill set was lost to the club, change did not occur and they continued with the status quo. I note that this club no longer exists.
More than two decades later at a recent CDI Future Director Information Session, a board candidate told me, in public, that he was a chauvinist and of the view he shouldn't have to sit and listen to me. Perhaps due to my experience and thick skin, I was quick to reply: "The good thing about Australia is that you are entitled to your opinion, even though I think it's wrong and should be kept to yourself". As I then watched him do his best to intimidate and bully two female board candidates, I thought about the strength of these women to nominate for a board position knowing that if elected they could be subjected to this bias on a regular basis. It is exactly that man's thinking and behaviour that we need to change if the industry is to grow and survive. We want to best candidates (male and female) nominating for our boards, not walking away because they are not welcome of even bullied. We also need male directors and management to be champions of change, actively encouraging diversity and making it clear that bias and bullying (be it gender, racial or any other form of discrimination) is no longer acceptable.
According to statistics released by the Federal Government's Workplace Gender Equality Agency in August 2016, 46.5 per cent of all employees in Australia are women. However, women hold just 14.2 per of chair positions, 23.6 per cent of directorships, and represents 15.4 per cent of CEOs and 27.4 per cent of key management personnel. Australian Institute of Company Directors (AICD) figures as of 31 October 2016 put the percentage of women on ASX 200 boards at 24.5 per cent while 17 boards on the ASX 200 still do not have any women.
The poor representation of women on boards has raised questions about board recruitment practices, which brings us back to the question: Is board recruitment based on the best skills, experience and background, or is there still a tendency towards hiring the best man for the role? Statistics support the latter. Even for businesses that purport to appoint on merit, there is a tendency to define merit as "people like us".
The business case for increasing the number of women on boards in clear. The 2007 McKinsey & Co report Women Matter concluded "the companies where women are most strongly represented at board or top-management level are also the companies that perform best". Research by the Reibey Institute in 2001 found that "ASX500 companies with women directors on their boards delivered significantly higher return on equity than those companies without women directors".
I probably shouldn't even need to mention the strong body of research in this area. As AICD Managing Director and CEO John Brogden said in July 2016, "The merits of women on boards is a proven argument. There's no debate in that."
The AICD was prominent in the development of a diversity-reporting regime, which was incorporated into the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations in 2011. Every listed entity is not required to formulate a diversity policy and must disclose its achievement against gender objectives set by the board as well as the proportion of women on the board, in senior management and employed throughout the whole organisation.
The AICD has also set a target of 30 per cent of board seats to be filled by women by the end of 2018, and wants ASX 200 companies to voluntarily meet this target rather than face government mandates. The AICD recognises that this time frame may not be practical for smaller listed companies, private business and not for profit organisations, which lack the flexibility and resources to implement such a change quickly, but they encourage all companies to adopt the new policy. As of 31 October 2016, the AICD reported that 53 ASX 200 Companies had reached the target and that if the current average appointment rate continues, the target will be met on schedule.
I was fortunate to attend the Women World Changers Summit in October. I agreed with company director and campaigner for the rights of women and children Wendy McCarthy, who said: "We are on the backs of those who came before us but cannot lose sight that in industries such as law firms, merchant banks and accounting firms, 60 per cent of graduates hired are women, yet in leadership roles, they still only account for 10 per cent." The low retention of women in management roles in these industries is attributed to both conscious and unconscious bias, and in some cases discrimination and bullying.
Given my background in banking, I was buoyed by a presentation and subsequent discussion with Ainslie Van Onselen, Head of Inclusion and Diversity and Director of Women's Markets at Westpac Group, who noted that Westpac is not track to achieve 50 per cent gender diversity by 2017. Westpac acknowledges that 50 per cent of their clients are women and therefore their staff and management team needs to reflect their customers.
Gender Diversity in Clubs
In the club sector, gender diversity falls below community expectations. While 54 per cent of all NSW club employees are female, as of July 2016 women held just 12.5 per cent of directorships (based on ClubsNSW IMIS Database statistics)(the New Zealand statistics are very similar).
In 2008, IPART conducted a review of the NSW club industry and made a number of recommendations to improve club governance. ClubsNSW has been proactive in educating the club industry and many of these recommendations have been adopted and implemented as best practice including mandatory director training, maximum board size, the ability to appoint directors with required skill sets and triennial elections. However, effective board governance and attracting the next generation of directors is an ongoing challenge for many clubs and needs to be addressed. There is a potential tsunami of vacancies approaching as numerous directors step down after many years of service.
ClubsNSW recognises that bringing together a diverse range of skills and experience is a critical aspect of good governance and imperative for a challenging and constructive board culture, which is essential to ensuring clubs stay relevant. A club board that is more diverse and representative of its members will effectively understand and respond to members' needs. And let's not lose sight of the fact that 50 per cent of our members are female. Compelling evidence of the value and contribution of women in the boardroom and the positive impact they have on corporate culture and performance makes gender diversity on boards imperative. Our industry must avail itself of this significant source of talent, which is currently underrepresented at the board table.
(SOURCE: Debbie Organ, ClubsNSW Learning & Development Executive, ClubLIFE December 2016)
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