Over the past decade corporate Australia has made a genuinely dedicated and sincere effort to increase gender diversity on company boards.
The number of board seats at listed companies held by women has jumped from around 15 per cent in 2014 to closer to 34 per cent today in the complete absence of any gender quota laws or regulations.
This is well above the global average of 23.3 per cent and something to be celebrated. Numerous studies have suggested gender diversity is an asset to corporate governance, performance, and employee outcomes. However, new research shows the growth of female representation at chair level and in the C-suite has fallen behind the growth of female representation in the boardroom.
We need to keep an eye on this trend. If we are to rectify gender inequities like the gender pay gap recently highlighted by Workplace Gender Equality Agency Data, then corporate Australia’s ultimate goal should be dismantling the glass ceiling, not merely raising it.
According to Deloitte’s recently released ninth annual Women in the Boardroom: A Global Perspective report, 11 per cent of the more than 300 large, listed Australian company boards analysed were chaired by women in 2023, compared to around 5 per cent in 2014.
The data also shows that the proportion of female CEOs increased from 4.5 per cent in 2018 to 9.2 per cent in 2023. Similarly, the proportion of female CFOs grew from 11.6 per cent to 17.1 per cent in that time frame.
In and of itself, these are heartening statistics that demonstrate corporate Australia’s genuine commitment to gender equity in leadership roles. However, it is hard not to notice that the rate of growth for board and upper-C suite positions is trending behind the growth in female boardroom representation. Why is that happening?
A key factor is that the female talent pipeline in the broader business community is still shorter than the male talent pipeline. The data also suggests that on average Australian female company directors sit on more boards than their male counterparts, indicating that although corporate Australia is trying to enhance gender equity at the highest levels – there is an issue of candidate supply.
While the existence of a class of highly competent female governance experts is clearly good for the Australian business community, we must ensure that this group doesn’t become exclusionary and remember that true gender diversity necessitates a diversity of candidacy. Efforts need to be made to lengthen and expand the female talent pipeline.
One first step is to be more intentional in hiring women for operational roles that can serve as training grounds for the C-Suite, while also reviewing selection processes to remove any inadvertent biases against female candidates.
This should be supported by gender-based objectives in succession planning and setting “targets with teeth” for executive teams, such as making remuneration packages or performance assessments subject to gender inclusion metrics.
It is also important to support learning and development opportunities for female staff, who may have less time to take part in extracurricular activities necessary to gain the qualifications to sit on a board or become chair as women, on average, shoulder a greater share of domestic and familial responsibilities than men do.
The good news is that the report shows this talent pipeline is growing, with women occupying almost half of audit committee chair positions and 40 per cent of governance chair positions. Yet it appears there is still some resistance to passing on the top job to these female sub-board committee chairs.
This indicates that biases and loyalty to outdated gender norms like the idea that men are more suited to leadership positions are still holding us back – perhaps even subconsciously. Research conducted by Deloitte Access Economics tells us that dismantling these gender norms could boost the economy by $128bn every year through enhanced female participation in the economy.
Another positive step is an attempt to enhance boardroom representation of individuals with experience in non-traditional but crucial roles like Chief People Officer, Chief Information Officer, or Chief Marketing Officer.
Improving board representation of individuals with these professional backgrounds will not only help enhance female board representation (particularly in relation to CPO and CMO roles, which are more likely to be filled by female candidates) but increase the diversity of skillsets among directors and company chairs, which is an asset for any company.
One of the most common criticisms modern boards face is a perceived lack of perspective on certain issues, and this can certainly be rectified by enhancing candidate diversity by selecting directors from non-traditional backgrounds.
Corporate Australia has a clear and genuine commitment to gender diversity, and we really shouldn’t forget how much has been collectively achieved in a decade through voluntary initiatives.
However, dismantling the glass ceiling is a complicated process that requires careful consideration of the structural barriers to further progress, and the considerate development and execution of long-term plans designed to overcome them.
The good news is that this perspective is one rapidly gaining prominence in the corporate sphere, and I am confident that the next decade will be even better for female representation in leadership roles than the last.