I’m going to start with a dirty word here, but it’s something we need to discuss.
Equal participation of women in the workforce and in leadership positions is a paramount issue, right now. In 2016, the United States came close to having its first woman president and there were seven highly qualified female candidates in the running to be the first female UN Secretary General. Needless to say, in both scenarios, the role remained filled by a man.
In many regards, Australia has been a pioneer for gender equality. In 1902, Australia was the first country in the world to give women both the right to vote in federal elections and the right to be elected to national parliament. We were the first country to develop gender-sensitive budgeting in 1984 . Australia’s gender pay gap (at 16%) is one third lower than the global gap of 24% (the fact that this gap still exists is nothing to celebrate but it is better in Australia than in many parts of the world). Our workforce participation rate is slightly above OECD averages. Women graduate from university at notably high rates. We are one of only six countries in the world that appoints an Ambassador for Women and Girls, as a central advocate for the empowerment of women and girls in Australia’s diplomatic, development and defence concerns, to advance global progress, peace and stability. The AICD has a target of 30% of ASX 200 board seats to be occupied by women by 2018, aligned with the 30% critical mass suggested by the UN.
While these are positive indicators, women in Australia still face obstacles. As of 1 January 2017, Australia ranks 50th (out of 193) on the Women in National Parliaments world classification, and 46th (out of 144) in the OECD’s Global Gender Gap ranking.
So how can we go about closing the gap? The percentage of women in parliament has doubled in the last 20 years (to just 23%), which is in part attributed to the adoption of electoral gender quotas as a way to expedite gains over a short period of time. As at 2015, quotas exist in more than 120 countries. Egon Zehnder’s most recent Global Board Diversity Analysis (GDBA) shows in recent years there have been incremental gains in women’s representation on boards worldwide. Close to 19% of seats on the boards of the world’s largest companies were held by women in 2016, an increase of almost 5% since 2012. Analysts from the report point to Italian and French company boards having been ‘transformed’ by government-enforced quotas passed in 2011. Italy’s companies saw growth in women’s representation soar, from 8% to 32%; France saw an increase from 21% to 38% women on boards.
Although quotas may be unpopular in Australia, their success is proven, and I would argue, remain one key ingredient to shifting the dial on leadership in Australia.
So what exactly do women’s leadership and gender equality bring to the table? It is estimated that women could increase their income globally by up to 76% if the employment participation gap and the wage gap between women and men was closed. This is calculated to have a global value of USD 17 trillion.
Gender equality is good for business and society. Companies greatly benefit from increasing leadership opportunities for women – it is estimated that companies with three or more women in senior management score higher in all dimensions of organisational effectiveness. More diverse teams have higher profitability and greater client satisfaction than non-diverse teams, and firms with higher levels of gender diversity outperform the market. Women’s participation in national parliaments tends to bring issues from violence to education and health to the forefront, whereas they may not have otherwise made the agenda.
So what action is required to accelerate change? Quotas can be a central lever, and, we need to tackle the problem on three levels: (1) nationally, through gender equal labour policies and practices; (2) by boosting organisational awareness and action, through concerted efforts in identifying and fighting bias; and (3) through individual engagement, where people recognise gender equality as a positive-sum game, and not a rearrangement of benefits where the gains of women are seen as the loss for someone else.
One of the main arguments against quotas is that it undermines meritocracy. However, a race can hardly be meritocratic if some of the participants start miles behind and also face bigger obstacles along the way. The meritocracy argument also falls over when taking into account that women tend to be hired and promoted on experience and their track record, whereas men are hired on their potential.
The adoption of quotas also instigates a positive cycle of change: it can result in greater gender diversity, dispel the notion of a pipeline problem, and create more professional and formal approaches to recruitment and board selection. Encouragingly, men in countries with quotas support them in higher numbers than men in countries without them.
Gender quotas should be dirty words no more. We need to talk about quotas, tirelessly, until we achieve the critical mass of 30%, and then re-set the bar and strive for 50/50 representation, which will result in benefits for 100% of the population. It’s not just the right thing to do; it’s good for business, for communities and the economy.
This is an edited extract from the AICD’s latest Gender Diversity Progress Report. For the full article and the report, click here.
1Budlender, D, Sharp, R & Allen, K 1998, How to do a gender-sensitive budget analysis: Contemporary research and practice, Australian Agency for International Development, Canberra and the Commonwealth Secretariat, London, p. 3.
2Actionaid 2015, ‘Close the Gap! The cost of inequality in women’s work’, p. 9.
3McKinsey & Company 2014. ‘Women Matter 2014. GCC Women in Leadership – from the first to the norm’, p. 6.