5 March 2014 — Gender diversity lowers risk and improves organisational performance, according to an Ernst & Young report that looks at the issue from the perspective of male business leaders.
The fifth instalment of EY’s Women in Leadership series, the report is based on interviews with nine high-profile male leaders in the Australian public and private sectors: David Gonski, Dr Simon Longstaff, General David Hurley, Ian Narev, Alan Joyce, Dr Martin Parkinson, Brian Schwartz, David Thodey and Brian Hartzer.
The sentiment of In His Own Words: the male perspective on gender diversity is similar for all participants: gender diversity makes sense from both an economic and social justice frame.
“We know diversity in executive teams and in the boardroom helps drive better financial results,” Brian Hartzer, Westpac chief executive, Australian Financial Services said. “We know the rise in female employment has boosted Australia’s economy by 22 per cent since 1974. And we know closing the gap between male and female employment would boost GDP by up to 13 per cent.”
David Gonski agreed. “From both a social justice perspective and from a practical standpoint of wanting the best person for the job, I think it is frankly ridiculous that we only appoint senior people from 49 per cent of the population.”
It was, too, a uniquely Australian problem, as the country had one of the world’s lowest rates of educated women participating in the workforce and one of the world’s highest rates of female education.
Some sobering statistics reported included:
- women are still paid 17.5 per cent less than men for the same work
- there are 14 per cent less women participating in the workforce than men
- fewer than one in 10 women are directors of ASX 500 companies
- more than a third of ASX 200 companies have no female directors
So what’s the problem?
A range of factors, largely cultural, were responsible for the continued exclusion of women from leadership roles, the report stated, and initiatives to improve the situation would not work unless organisations addressed resistance to change, ingrained organisational and cultural beliefs, unconscious biases, societal norms and plain ignorance.
“I think there are some men who fear having to compete with women,” David Gonski said.
Dr Simon Longstaff, executive director of the St James Ethics Centre, said ignorance was a large factor.
“The older generation doesn’t appreciate the capacity of the women coming through,” he said. “People are used to having a certain kind of person succeed.”
Men also didn’t realise the privilege they held in the workplace either, the group concluded.
The current system was not based on merit, Dr Longstaff said.
“Men rationalise their privilege without realising they validate every belief through prejudice,” he said.
That setting targets or quotas went against hiring based on merit was a common argument levelled against those employing this tactic to increase female representation, the report stated, however as the current system was not itself based on merit, gender targets could be effective.
Picking people in your own image
Commonwealth Bank chief executive Ian Narev said unconscious bias in organisations was a large contributing factor.
“Unconscious bias leads to one of the biggest pitfalls for leaders: recruiting in their own image,” he said, which meant men recruiting more men.
At CBA, he said, the top 300 leaders were required to go through unconscious bias training.
Even with initiatives in place, cultural change was needed to ensure women could progress through the organisation, the report stated.
Dr Martin Parkinson, secretary of the Department of Treasury, agreed.
“When around half of Treasury graduates were women, we thought we had fixed the issue,” he said. “We thought that, over time, we would see greater proportions of women coming through into the senior executive ranks. In fact, this didn’t happen.”
But even with initiatives supporting part-time work, childcare, and continuing study, women were not making it through.
Interviews and workshops found that jobs had not been designed to support part-time staff, meetings were being held when people with children could not attend, and the work cycle was allocating work after hours, picked up by men who could stay back.
“I realised that all the interventions had been quite ad-hoc – in response to systems,” Dr Parkinson said. “We were not getting to grips with the underlying causes.”
How do we fix it?
Organisations needed to address the cultural issues that stopped targets and flexible work arrangements from increasing women’s representation in senior roles.
“These issues need to be led by the CEO of an organisation, and supported by their leadership team,” Dr Parkinson said. “And it is men who are still predominantly running large organisations in this country.
The report recommended that these leaders:
- articulate the case for gender equity
- constantly communicate the value of gender diversity among the leadership team and more broadly across the organisation
- stop promoting clones
- give equity targets real consequences
- welcome constructive criticism and new ideas
The report also provided recommendations that organisations:
- make flexible working arrangements work
- degender the conversation on parental leave
- change thinking on linear career paths
- get women into the pipeline for progression
Government needed to make some changes too:
- set up parental leave schemes, educational campaigns and community groups that support shared care and empower fathers to take part in childcare from the beginning
- provide affordable public childcare
- make childcare tax deductible
- make flexible working hours a right for all Australians
- stop writing bias into legislation
“The results [of the report] support the long-argued case for change and highlights the important role that men need to play in driving this agenda,” said EY Oceania chief executive Rob McLeod.
“The issue is not only of economic importance, but also critical to the social advancement of the nation – it’s about building a better working world.”
See the full report.
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