Its been discussed amongst members of the Australian Institute of Company Directors for quite a few years, a lot of inequity issues have. Good directors from the Not for Profit sector (male and female) find it hard, many impossible to break into the For Profit boards if they're had a good history, a long history with NFPs.
For some, its the longer they're NFP directors the more likely they'll stay there. Is that a problem? No.
Unless you aspire to be on a public company and the door really is shut. Irrespective of gender the way through is sometimes the old boys network, or the old school tie thing and sometimes the numbers of female directors to choose from is low so they'll grab a lady with good NFP experience and open the door to get their gender balance improved. Not often people have an easy transition from NFP to FP so we're exploring experiences of people in low numbers.
So is it true that boards with good gender equality are more profitable or work better? The point is argued & to be honest it may or may not be the whole picture, or rather it maybe true but there's a little more to it.
Generally good board culture is imperative and a board with good board culture may seek to determine if gender diversity is an ideal to pursue & what a good gender balance looks like. Boards with very good board culture are usually more likely to have a proper Director Evaluation Programme, a Board Assessment Process (yes they're 2 different things) and a Director Education Programme. They will usually assess board meetings for efficiency, participation, process and compliance & there'll be a Chairman Evaluation as well.
Sounds weighty and prone to becoming bogged down. No. They're generally very short but thorough processes that point to skills lacking and where governance needs a leg up or training needs to be set out.
And there's the problem, boards with GOOD processes that lead to a continual path of improvement ALWAYS do better...and most of them generally consider gender diversity to be an important part of "Board Culture"
Stop, now breath deeply and focus.
Board Culture. Its a part of an adopted Board Culture, not an accepted part of board efficiency. The AICD Courses all point to Gender Equity being a noble, sensible and fair thing to slide into any board's culture. I totally agree.
But when you assess a board, the criteria does not come down to x number of females is required for the best performance of the company or the board. That is just patently wrong. I sat on a board which had a positive culture and they walked the talk by ensuring that one sub committee it ran had an even number of committee members with 50% of them being women.
Ironically the committee did ok but it was hamstrung. We had more top quality women than men to choose from. Going 50:50 was set but it meant we had a gentleman on the committee who was far less skilled and experienced than one of the women who had to miss out due to the prescribed quota number. When the gentleman in question resigned because he wasn't coping we changed our charter for that committee and ended up with a higher number of women than men and the committee went forward. Now don't interpret that as being women are better than men. That's not the case, the majority of the best candidates just so happened to be women. A subsequent committee had one less woman than the men and it preformed equally well. We were able to pick the best candidates and we didn't let gender be a barrier NOR and an advantage to anyone. Merit & performance were the key.
This is the cautionary example of why installing quotas can actually lead to gender based criteria that then stifles a committee. Heaven help you if you get that problem at the board level.
Will the school tie/boys club thing continue? Yes. People will refer other directors they know & trust or have worked well with on other boards. There are clear advantages & disadvantages of doing that, the primary motivation should ALWAYS be your fiduciary duty. Is it in the company's best interest? If so, then whether they're male or female, known unknown or a long time pal is irrelevant.
It comes back to merit. Gender imbalance will continue for sometime. Every AICD course I've been to was male dominant, some not by much, some by a lot. Course enrolments for MBAs have only in the last decade got above 40% for women.
Should we push for more women in the field? I think no. I think we should encourage more women who are interested and make their pathways same as men's. That way if I'm part of a board looking to replace a resigned director we have a bigger field to choose from and therefore are better placed to find a better director the AGM is more likely to re-elect.
Do women possess certain skills men don't in the board room? Possibly but its not science and it sure isn't reflected in AICD training that your average board needs x number of women to be across a particular skill set because men haven't got it.
Should boards be 50:50 men & women? They can, I think it doesn't matter, they need to be 100% compliant with the Corporations Act, they need to make good strategy and function well in the best interests of the company...whether they're all men or all women or some sort of split really is irrelevant.
Breaking into the boards of listed companies is not easy for the new & aspiring director. People (male or female) will tend to use what they can to get the door open a sliver, call a friend, get a tap on the shoulder, speak with an ex school mate. It happens. For now though its quite possible that whilst there's a push for more female directors & there's less to choose from that some will take on more than they can adequately devote time to. One prominent WA based director had this problem of popularity and at one point was a full time director sitting on 7 boards and 3 of them she chaired.
It didn't take long for her to heed the advice that she needed to cut her directorships and chair roles to a point where all boards got a fair share of her time & got good value for money. No one should be on 7 boards and chairing 3 of them. Too thin over too much. It wasn't her gender that caused that mistake, it was ambition over taking her ability.
That's not gender specific, that's a human thing.
So don't chase a set number of women for a board. If you elect less than adequate directors (male or female) it will show, it will reflect in the board's performance.
Same for CEOs. There are brilliant men & women CEOs to choose from, choose the one best suited to your company. Don't grab a token male or female thinking they will therefore by virtue of their gender provide a performance based skill set you're lacking.
A culture of equality is admirable, but its shouldn't be silly or at the cost of performance.
I worry in some cases less than adequate female directors have been acquired and because they may not have been the best director (irrespective of their gender) that other female directors get labelled quota queens and less than worthy.
Director evaluation is paramount. It should be used to improve director skills experience and performance and then hopefully we'll look solely at merit not a required gender ratio.
Remember at present there just aren't the same number of female CEO or female board applicants so that'll probably reflect in the company numbers for quite some time.
I note the comments that there is not many other fields where gender balance has become such a paramount social issue. The 50:50 aspiration has not been applied to nursing, truck driving, plumbing, dress making, mid-wifery, plant operators, shearers or welders. Can women do these jobs? Yes they can and they do and many are highly skilled at what they do.
Do we push for 50:50 participation though?
No seems like only in parliament and on boards.
I've worked on committees & sat on boards with women and men. I've worked with male & female CEOs, CFOs etc some quite younger than me. Age & gender never really came into it.
I don't think it should pushed & pursued to the detriment of the company but if a woman wants to become a great CEO/Director/whatever she should be encouraged and supported.
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