Tracking Diversity

This year’s Gender Balance on Australian Government Boards Report showed that at June 2014, women held 39.7 per cent of the 3,206 board positions on 387 Australian government boards and bodies. This was a two percentage point decline on the figure 12 months earlier.

Since the previous Federal Labor Government was in power, the Office for Women, now within the Department of the Prime Minister and Cabinet, has had a gender equity target of 40 per cent male, 40 per cent female and 20 per cent of either gender for all government boards. The current Coalition Government recently restated its commitment to that target.

In terms of a departmental breakdown of boards, nine out of 18 portfolios achieved the 40/40/20 formula in FY14 – down from 13 out of 18 the previous year.

In July, independent Senator Nick Xenophon (SA) described the decline in the gender balance of government boards as an “alarming slip” that ran counter to community expectations. In response, he introduced the Australian Government Boards (Gender Balanced Representation) Bill 2015, which has been referred to the Senate Finance and Public Administration Committee for inquiry, with a report date of 8 September.

The bill proposes that the 40/40/20 formula become mandatory for all Australian government appointments to boards and that each government department be required to prepare an annual report on the gender composition of its board.

At the state level, the Tasmanian Government recently launched 50/50 gender equity targets strategy for public sector boards by 2020. Victoria has set hard quota of a 50/50 for all courts and paid public sector board positions by 2018.

In Queensland, where 31 per cent of public sector board positions are filled by women, Premier Annastacia Palaszczuk has mandated that 50 per cent of board positions on state-owned corporations will be held by women by 2020.

What’s in a name?

The language of board gender equity — targets, quotas and assurances — is becoming more important.

“The AICD is a firm believer in targets, not legislated quotas,” says AICD Managing Director & CEO John Brogden. “Quotas are counterproductive. They can mask the fact that the structural changes necessary to change organisational culture have not occurred. This can mean that female representation will never rise above the prescribed quota.

“The real risk is quotas become ceilings on the number of woman on a board.

“If boards in both the public and private sectors are to avoid the introduction of quotas, they need to implement a range of measures now to ensure a faster rate of change. These changes should include transparent recruitment practices and regular board evaluation processes.”

The AICD supports a minimum gender diversity target of 30 per cent and is a strong supporter of the 30% Club, launched in Australia in May. The 30% Club aims to improve diversity by working closely with executive search firms and organisations in the public and private sectors.

In partnership with the Australian government, the AICD’s Board Diversity Scholarship program provides education and training for emerging and current female directors, and several state divisions have partnered with state governments to provide scholarships for women to attend the AICD courses.

“Gender diversity should be viewed as a strategic imperative that leads to better decision-making and board effectiveness,” says John Brogden.

“It’s important to note that dedicated programs are only part of the solution to the issue of board diversity. Succession planning is also important. It allows boards to consider the objective of diversity within the broader context of a company’s operation.”