A Norway-style board quota system will not solve Australia’s gender crisis at the very top of organisations.
It will not guarantee an increase in the tiny percentage of women CEOs on the ASX 200, which will drop to just 3% following the departure of Gail Kelly from Westpac next year.
Nor will it be enough to increase the number of women in senior executive leadership positions.
At least that’s what the example of Norway has shown.
While releasing the Workplace Gender Equality Agency data on the true state of workplace gender inequality on Tuesday, director Helen Conway was asked the inevitable question about quotas. Is it time we introduced mandatory quotas for women on boards? Will it solve the lack of women in leadership problem?
The question was asked in the context of a pretty poor report card for Australian business. Women account for just one in four positions in the upper three levels of management. Analysis of the 11,000 companies to report to WGEA also found the gender pay gap between men and women working full-time is currently 19.9%, higher than the 18.2% national average reported in August.
Progress for women in leadership has indeed been slow. So slow that many leading businesswomen who were once staunchly against quotas, including Elizabeth Proust, Heather Ridout and Ann Sherry, have changed their minds on the matter.
But Conway does not believe board quotas are the answer. Leaving aside the fact that there’s simply not enough appetite from business and government to see a quota-system mandated, Conway believes that as the Norway experience shows, board quotas will fail on addressing the imbalance in senior executive management.
In 2003, Norway passed a law requiring public companies to fill 40% of board seats with women in order to significantly improve its rate of women on boards — just 5% in 2000.
As Conway pointed out, there were a few challenges from the outset. Firstly, many listed companies privatised (385 of the then 563 publicly traded companies) in order to avoid having to meet the quota.
Secondly, presumably to meet a stiff deadline as easily as possible, many organisations simply drew on the same pool of women. They generally only brought in experienced company directors. There were not enough available in Norway, so companies looked overseas.
But the real kicker for Conway has been the result in the senior executive ranks.
As research found earlier this year, the Norway experience showed the women filling the mandated board positions were actually more qualified than their predecessors. The authors believe “untapped networks of top business women were activated by the policy” but this did not trickle down to the senior executive level. There was no significant increase in female executives.
Quotas seem like a drastic measure, and are often provided as a “last resort” solution for solving the problem. But the reality in the Norway experience shows that board quotas are not actually drastic enough.
As Conway told Women’s Agenda this week, there is no “silver bullet” solution to solving workplace gender inequality. What’s needed is a significant cultural and structural overhaul. We need to end the assumptions about what men and women want to do – the ones that usually underpin bias. We need to mainstream flexible work so that people aren’t disadvantaged career-wise. We need to set and publicise targets for women in leadership. We need to admit there’s a gender pay gap problem and make rectifying it a priority. We need to take the matter of workplace gender equality from being an HR issue, to one that filters through every aspect of our workplaces and daily lives.
It may actually be dangerous to believe we can keep doing what we’re doing and turn to the final resort of a ‘quota system’ when, a few years down the track, we find once again that little has changed.
That’s especially true when you consider some of the measures Australian companies have so far failed to take seriously. Just 8.8% of organisations have set a target to lift the number of women on their boards, according to the WGEA analysis. Only 13.6% of employers have a strategy for flexible working (although a good majority more have a ‘policy’). Just 13.2% have a strategy to support employees with family or caring responsibilities. And less that one in four organisations have conducted a gender remuneration gap analysis to examine pay discrepancies.
The good news is that we now have data to provide the starting point for a significant change program. “There is no more hiding,” Conway said on Tuesday.