companydirectors.com.au
MARCH - MAY 2016
QUARTERLY REPORT | VOLUME 4
30% by 2018:
Gender diversity
progress report
2
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
companydirectors.com.au
A great start to 2016
Female appointments to ASX 200 boards have
tracked above 40 per cent so far in 2016, the
highest rate since we began monitoring figures
in 2009. This solid performance in the first five
months of the year gives us hope that we may
reach our 2018 target.
The monthly rate of female appointments reached as high
as 47 per cent in the first quarter before settling at 41 per
cent in May – a still impressive figure.
The challenge now is for all parties – ASX chairs, nonexecutive directors, executive search consultants, investors and
management – to ensure this issue remains centre stage and
to assist with the identification of talented female directors.
We know from our engagement with ASX 200 chairs that
many still don’t see this as a strategic imperative that leads
to better business performance and board decisions. We
urge all chairs to read available research, conduct wider
searches for vacant positions and work with recruiters to
identify the obvious talent within our female ranks.
This report features an overview of KPMG’s analysis of the
diversity disclosures made by companies under the ASX
Corporate Governance Council’s Corporate Governance Principles
and Recommendations for financial years ending in 2015.
One of KPMG’s key findings was that very few entities set
or disclosed transparent quantitative objectives such as “30
per cent director seats to be held by women by 2018.” The
majority instead referred to the implementation of diversity
programs or initiatives such as pay equity reviews as their best
steps towards increasing the number of women on boards.
Although this is progress, particularly for organisations
that have only just started on their journey, it is vital
that organisations set numeric targets and transparently
report on them.
Transparency leads to accountability. Without accountability
and ownership, the number of women, particularly in
executive positions, will not increase. We encourage all
organisations to set numeric targets and start working towards
better gender representation across senior management.
We are pleased to announce a new partnership with Chief
Executive Women (CEW) during 2016 and beyond. We
recently co-hosted four national events, connecting our
members and introducing current and emerging female
directors to male ASX 200 directors.
AICD and CEW have also formed an advisory group of
influential male and female chairs and non-executive
directors. This group will produce best practice gender
reporting guidelines for board chairs, chairs of remuneration
and nominations committees and non-executive directors
with support from Boston Consulting Group.
The guidelines will help boards demand better gender
reporting from CEOs and executive teams, including
increased management focus, enhanced reporting capability
and accountability for the achievement of diversity targets.
The resource will be launched later in the year and we
encourage all of our members to use it and promote it to
their networks.
We have said this many times, but we will keep saying it:
we must collaborate and support each other effectively to
ensure sustainable and progressive change occurs, enabling
us to reach all of our targets in the desired timeframes.
John Brogden
Managing Director & Chief Executive Officer,
Australian Institute of Company Directors
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
Progress report
There have been a number of additions to the list of
companies with at least 30 per cent female directors since
February. The current number of companies with at least
30 per cent female directors is now at 52 (31 May 2016).
Additions
1. AGL Energy joined the list on the appointment of
Jacqueline Hey to the board on 21 March.
2. Bellamy’s Australia Limited joined the ASX 200 in March.
It already had more than 30 per cent female directors.
3. CYBG PLC joined the ASX 200 in March. It already had
more than 30 per cent female directors. It subsequently
moved out of the list on the retirement of Barbara
Ridpath on 20 May.
4. Healthscope Limited joined the list on the appointment of
Jane McAloon to the board on 1 March. It subsequently
moved back out of the list on the appointment of Dr Ziggy
Switkowski to the board on 4 April.
5. IPH Limited joined the ASX 200 in March. It already had
more than 30 per cent female directors.
6. Nine Entertainment Co.Holdings joined the list on the
appointment of Elizabeth Gaines to the board on 1 March.
David Haslingden also retired as Chair and was replaced
by an existing non-executive director Peter Costello.
7. REA Group Ltd joined the list on the appointment of
Susan Panuccio to the board on 22 March. Peter Tonagh
also retired from the board on 22 March.
8. Burson Group Holdings Limited joined the list on the
appointment of Margie Haseltine to the board on 30 May.
9. Southern Cross Media Group joined the list on the
appointment of Melanie Willis to the board on 25 May.
Chris De Boer also retired from the board on 26 May.
10.Oz Minerals joined the list on the retirement of Dean
Pritchard on 24 May.
11.Sky Network Television Limited was added to the list
in May after AICD identified that Robert Bryden was not
on the board.
Deletions
1. NAB left the list due to the appointment of Philip
Chronican to the board on 2 May.
2. GPT Group left the list on the retirement of Anne
McDonald on 4 May.
Change of company details (addition and deletion)
Recall Holdings Limited (REC) was removed from the S&P/
ASX 200, subject to final court approval of the scheme of
arrangement whereby the company would be acquired by
Iron Mountain Inc.
Recall Holdings was replaced by Iron Mountain Inc. (INM)
after the close of trading on 21 April. Wendy Murdock was
appointed to the Iron Mountain board on 21 April.
From zero to one female director
1. Christina Lampe-Onnerud was appointed to the Syrah
Resources Limited board on 24 April.
No female directors
There are currently 20 companies in the ASX 200 without
any female directors. The number fell in March when
Karoon Gas moved out of the ASX 200. There are still no
female directors on the Karoon Gas board. The number
increased back to 21 in April due to the Investa Office Fund
board restructure and appointment of new male directors.
In May the number fell again to 20 on the appointment of a
female director to the Syrah Resources Limited board.
companydirectors.com.au
The full list of ASX 200 companies with the number of women on their boards is listed below. Individual chairs with an
asterisk next to their name are members of the 30% Club and have committed to achieving at least 30 per cent females
on their boards by 2018 or as soon as they can.
No. of Female
Directors
% of Female
Directors
Elizabeth Alexander
5
71.4%
ASX 200 Company
Medibank Private Limited
Chair
Woolworths Ltd
Gordon Cairns*
4
50.0%
AMP Limited
John Palmer – Interim Chair
4
50.0%
Mirvac Limited
John Mulcahy*
4
50.0%
Boral Limited
James Clark
4
50.0%
Nine Entertainment Co. Holdings Limited
Peter Costello
3
50.0%
Duet Group
Douglas Halley*
4
44.4%
Dexus Property Group
Richard Sheppard*
3
42.9%
Spark Infrastructure Trust
Douglas McTaggart
3
42.9%
Navitas Limited
Harvey Collins*
3
42.9%
Super Retail Group Limited
Robert Wright*
3
42.9%
Spotless Group Holdings Limited
Margaret Jackson*
3
42.9%
Bellamy's Australia Limited
Robert Woolley
3
42.9%
Pacific Brands Limited
Peter Bush*
3
42.9%
Programmed Maintenance Services Limited
Bruce Brook*
3
42.9%
Trade Me Group Ltd
David Kirk*
2
40.0%
IPH Limited
Richard Grellman
2
40.0%
Burson Group Holdings Limited
Robert McEniry
2
40.0%
Japara Healthcare Limited
Linda Nicholls*
2
40.0%
Scentre Group Limited
Brian Schwartz*
3
37.5%
Stockland Corporation Ltd
Graham Bradley*
3
37.5%
REA Group Ltd
Hamish McLennan
3
37.5%
CSL Limited
John Shine*
3
33.3%
Macquarie Group Limited
Peter Warne
3
33.3%
Woodside Petroleum Ltd
Michael Chaney*
3
33.3%
Suncorp Group Limited
Dr Ziggy Switkowski*
3
33.3%
AGL Energy Limited
Jeremy Maycock*
3
33.3%
Fortescue Metals Group Ltd
Andrew Forrest*
3
33.3%
SEEK Limited
Neil Chatfield*
2
33.3%
Bank of Queensland Limited
Roger Davis
3
33.3%
Bendigo and Adelaide Bank Limited
Robert Johanson*
3
33.3%
BT Investment Management Limited
James Evans
2
33.3%
Orora Limited
Christopher Roberts*
2
33.3%
IOOF Holdings Ltd
Roger Sexton*
2
33.3%
Iron Mountain Inc.
Alfred Verrecchia
4
33.3%
JB Hi-Fi Limited
Gregory Richards
2
33.3%
Sky Network Television Limited
Peter Macourt
2
33.3%
CSR Limited
Jeremy Sutcliffe*
2
33.3%
MetCash Limited
Robert Murray
3
33.3%
OZ Minerals Limited
Neil Hamilton
2
33.3%
InvoCare Limited
Richard Fisher*
2
33.3%
Asaleo Care Limited
Harry Boon
2
33.3%
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
ASX 200 Company
Chair
No. of Female
Directors
% of Female
Directors
Southern Cross Media Group Limited
Peter Bush*
3
33.3%
Retail Food Group Limited
Colin Archer
2
33.3%
Virtus Health Limited
Peter Macourt
2
33.3%
Telstra Corporation Limited
John Mullen
3
30.0%
Wesfarmers Limited
Michael Chaney*
3
30.0%
Brambles Limited
Stephen Johns*
3
30.0%
QANTAS Airways Limited
Leigh Clifford*
3
30.0%
Coca-Cola Amatil Limited
David Gonski*
3
30.0%
Henderson Group PLC
Richard Gillingwater
3
30.0%
Sims Metal Management Limited
Geoffrey Brunsdon*
3
30.0%
GPT Group
Robert Ferguson
2
28.6%
Caltex Australia Limited
Greig Gailey
2
28.6%
Aurizon Holdings Limited
Timothy Poole
2
28.6%
Sonic Healthcare Limited
Mark Compton
2
28.6%
Aristocrat Leisure Limited
Ian Blackburne
2
28.6%
Incitec Pivot Limited
Paul Brasher*
2
28.6%
The Star Entertainment Group
John O'Neill*
2
28.6%
Healthscope Limited
Paula Dwyer*
2
28.6%
Paula Dwyer*
2
28.6%
Sydney Airport Limited
Trevor Gerber*
2
28.6%
Iluka Resources Limited
Gregory Martin*
2
28.6%
Blackmores Limited
Marcus Blackmore
2
28.6%
Carsales.com Limited
Jeffrey Browne
2
28.6%
Link Administration Holdings Limited
Michael Carapiet
2
28.6%
Dulux Group Ltd
Peter Kirby
2
28.6%
Perpetual Limited
Peter Scott*
2
28.6%
Cromwell Property Group
Geoffrey Levy
2
28.6%
IRESS Limited
Anthony D'Aloisio
2
28.6%
Downer EDI Limited
Richard Harding
2
28.6%
Myer Holdings Limited
Paul McClintock
2
28.6%
Sigma Pharmaceuticals Limited
Brian Jamieson
2
28.6%
Australian Pharmaceutical Industries Limited
Peter Robinson*
2
28.6%
Ardent Leisure Group
Neil Balnaves
2
28.6%
SAI Global Limited
Andrew Dutton
2
28.6%
Whitehaven Coal Limited
Mark Vaile
2
28.6%
APN News & Media Limited
Peter Cosgrove
2
28.6%
Cover-More Group Limited
Louis Carroll*
2
28.6%
Commonwealth Bank of Australia
David Turner*
3
27.3%
National Australia Bank Limited
Dr Kenneth Henry*
3
27.3%
BHP Billiton Limited
Jacques Nasser*
3
27.3%
Vicinity Centres RE Ltd
Peter Hay*
3
27.3%
ANZ Banking Group Limited
David Gonski*
2
25.0%
Transurban Limited
Lindsay Maxsted*
2
25.0%
Rio Tinto Limited
Jan Du Plessis
3
25.0%
Amcor Ltd
Graeme Liebelt*
2
25.0%
Insurance Australia Group Limited
Elizabeth Bryan
2
25.0%
Tabcorp Holdings Limited
†
companydirectors.com.au
ASX 200 Company
Chair
No. of Female
Directors
% of Female
Directors
APA Group
Leonard Bleasel
2
25.0%
Origin Energy Limited
Gordon Cairns*
2
25.0%
ASX Limited
Rick Holliday-Smith*
2
25.0%
Cochlear Limited
Rick Holliday-Smith*
2
25.0%
Computershare Limited
Simon Jones
2
25.0%
Fletcher Building Limited
Sir Ralph Norris*
2
25.0%
Challenger Limited
Peter Polson
2
25.0%
Platinum Asset Management Ltd
Michael Cole
2
25.0%
Bluescope Steel Limited
John Bevan
2
25.0%
CYBG PLC
James Pettigrew
2
25.0%
Ansell Limited
Glenn Barnes
2
25.0%
Shopping Centres Australasia Property Group
Philip Clark*
2
25.0%
St Barbara Limited
Timothy Netscher
1
25.0%
News Corporation
Keith Murdoch
3
25.0%
Greencross Limited
Stuart James*
2
25.0%
Village Roadshow Limited
Graham Burke and Robert Kirby
2
25.0%
Gateway Lifestyle Group
Andrew Love
1
25.0%
Westpac Banking Corporation
Lindsay Maxsted*
2
22.2%
QBE Insurance Group Limited
W Becker
2
22.2%
James Hardie Industries PLC
Michael Hammes
2
22.2%
AusNet Services Ltd
Peter Mason
2
22.2%
Fairfax Media Limited
Nicholas Falloon
2
22.2%
GrainCorp Limited
Donald Taylor*
2
22.2%
Genworth Mortgage Insurance Australia Limited
Richard Grellman
2
22.2%
Newcrest Mining Limited
Peter Hay*
2
20.0%
Ramsay Health Care Limited
Michael Siddle
2
20.0%
Lendlease Group
David Crawford*
2
20.0%
Flight Centre Travel Group Limited
Gary Smith
1
20.0%
Charter Hall Retail REIT
John Harkness
1
20.0%
Sirtex Medical Limited
Richard Hill
1
20.0%
Seven West Media Limited
Kerry Stokes
2
20.0%
WorleyParsons Limited
John Grill
2
20.0%
Mantra Group Limited
Peter Bush
1
20.0%
APN Outdoor Group Limited
Douglas Flynn
1
20.0%
Isentia Group Limited
Douglas Flynn
1
20.0%
Saracen Mineral Holdings Limited
Geoffrey Clifford
1
20.0%
Ozforex Group Limited
Peter Warne
1
20.0%
Credit Corp Group Limited
Donald McLay
1
20.0%
Goodman Group
Ian Ferrier
2
18.2%
Crown Resorts Limited
Robert Rankin
2
18.2%
Orica Limited
Malcolm Broomhead
1
16.7%
Domino's Pizza Enterprises Limited
John Cowin*
1
16.7%
Alumina Limited
George Pizzey
1
16.7%
Magellan Financial Group Ltd
Brett Cairns
1
16.7%
Adelaide Brighton Ltd
Leslie Hosking*
1
16.7%
Skycity Entertainment Group Limited
Christopher Moller
1
16.7%
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
ASX 200 Company
Chair
No. of Female
Directors
% of Female
Directors
BWP Trust
Erich Fraunschiel
1
16.7%
Charter Hall Group
David Clarke*
1
16.7%
MYOB Group Limited
Justin Milne
1
16.7%
Abacus Property Group
John Thame
1
16.7%
Regis Healthcare Limited
Mark Birrell
1
16.7%
Technology One Limited
Adrian Di Marco
1
16.7%
Pact Group Holdings (Australia) Ltd
Raphael Geminder*
1
16.7%
G8 Education Limited
Mark Johnson*
1
16.7%
Steadfast Group Limited
Francis O'Halloran
1
16.7%
Corporate Travel Management Limited
Anthony Bellas
1
16.7%
McMillan Shakespeare Limited
Timothy Poole
1
16.7%
Breville Group Limited
Steven Fisher
1
16.7%
Sandfire Resources NL
Derek La Ferla
1
16.7%
Costa Group Holdings Limited
Neil Chatfield*
1
16.7%
Syrah Resources Limited
James Askew
1
16.7%
G.U.D. Holdings Limited
Ross Herron
1
16.7%
Tassal Group Limited
Allan McCallum*
1
16.7%
Spark New Zealand Limited
Mark Verbiest
1
14.3%
Tatts Group Limited
Harry Boon
1
14.3%
Macquarie Atlas Roads Group
Nora Scheinkestel
1
14.3%
Brickworks Ltd
Robert Millner
1
14.3%
ALS Limited
Nerolie Withnall
1
14.3%
Growthpoint Properties Australia Limited
Geoffrey Tomlinson*
1
14.3%
Beach Energy Limited
Glenn Davis
1
14.3%
Aconex Ltd
Adam Lewis
1
14.3%
Select Harvests Limited
Michael Iwaniw
1
14.3%
Liquefied Natural Gas Limited
Richard Beresford
1
14.3%
CIMIC Group Limited
Marcelino Fernandez-Verdes
1
12.5%
ResMed Inc
Peter Farrell
1
12.5%
Asciano Limited
Malcolm Broomhead
1
12.5%
South32 Limited
David Crawford*
1
12.5%
Treasury Wine Estates Limited
Paul Rayner
1
12.5%
Fisher & Paykel Healthcare Corporation Limited
Antony Carter
1
12.5%
Vocus Communications Limited
David Spence
1
12.5%
Nufarm Limited
Donald McGauchie
1
12.5%
Primary Health Care Limited
Robert Ferguson
1
12.5%
Automotive Holdings Group Limited
David Griffiths
1
12.5%
Cleanaway Waste Management Limited
Martin Hudson
1
12.5%
Estia Health Limited
Patrick Grier
1
12.5%
Bega Cheese Limited
Barry Irvin
1
12.5%
Oil Search Limited
Richard Lee*
1
11.1%
Santos Limited
Peter Coates
1
11.1%
Harvey Norman Holdings Ltd
Gerald Harvey
1
11.1%
Premier Investments Limited
Solomon Lew
1
10.0%
Seven Group Holdings Limited
Kerry Stokes
1
10.0%
Westfield Corporation Limited
Frank Lowy
1
8.3%
companydirectors.com.au
ASX 200 Company
Chair
No. of Female
Directors
% of Female
Directors
TPG Telecom Limited
David Teoh
0
0.0%
Investa Office Fund
Richard Longes
0
0.0%
Evolution Mining Limited
Jacob Klein
0
0.0%
Qube Holdings Limited
Christopher Corrigan
0
0.0%
Northern Star Resources Ltd
Christopher Rowe
0
0.0%
Aveo Group Limited
Seng Lee
0
0.0%
Independence Group NL
Peter Bilbe
0
0.0%
Regis Resources Limited
Mark Clark
0
0.0%
Mineral Resources Limited
Peter Wade
0
0.0%
Mayne Pharma Group Limited
Roger Corbett
0
0.0%
ARB Corporation Limited
Roger Brown
0
0.0%
Mesoblast Ltd
Brian Jamieson
0
0.0%
Flexigroup Limited
Andrew Abercrombie
0
0.0%
Altium Limited
Samuel Weiss*
0
0.0%
Australian Agricultural Company Limited
Donald McGauchie
0
0.0%
Monadelphous Group Limited
Calogero Rubino
0
0.0%
GWA Group Limited
Darryl McDonough
0
0.0%
Western Areas Limited
Ian Macliver
0
0.0%
National Storage REIT
Laurence Brindle
0
0.0%
Austal Limited
John Rothwell
0
0.0%
* Members of the 30% Club
†
Elmer Funke Kupper is on a leave of absence from the Tabcorp board. He is still included in the numbers as a 3Z notice has not been filed with the ASX.
The number of boards that have reached the 30 per cent target and their position within the ASX 200 are included below.
52
ASX 200
boards have reached
the 30% target
30
ASX 100
2016
2018
2015
boards have reached
the 30% target
18
ASX 50
boards have reached
the 30% target
10
ASX 20
boards have reached
the 30% target
9
2017
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
Female representation on ASX 200 boards
29.1%
29%
in ASX 20
28%
27.4%
27%
in ASX 50
26%
25.7%
in ASX 100
25%
24%
23.6%
23%
in ASX 200
companydirectors.com.au
30% Club update
The 30% Club has been busy in the past three months producing
resources and events designed to connect with individuals that have
a key role in influencing and advocating for 30 per cent women on
ASX 200 boards by 2018.
Patricia Cross FAICD
Australian Chair and Non-Executive Director,
30% Club
The investors working group has organised two investor events for July in
Sydney and Melbourne. These events will provide an opportunity for asset
owners, Australian equity investment managers and other key influencers
working in the funds management community to connect with CEOs and
chairs of ASX 200 companies to discuss the goals of the 30% Club and the
importance of working together to increase the number of women on ASX
200 boards.
We thank ANZ and Bloomberg in advance for hosting our Melbourne and
Sydney events.
The education working group has produced a resource on the reasons given
by chairs and NEDs as to why they can’t or won’t appoint female directors to
their boards. These were common reasons, heard at different times by all of
the working group members and contributors to this resource.
Rhian Richardson
Board Diversity Manager,
Australian Institute of Company Directors
We look forward to sharing this resource with you, revealing some of the
barriers women still encounter when seeking board appointments and the
data that proves the obsolescence of these reasons.
One of our steering committee members Susan Oliver, has produced a Charter
for non-executive directors as affiliates of the 30% Club. We plan to expand our
reach from only chair members, to all directors of the ASX 200 and ask them
to commit to a set of practices and principles that will enable more women
to be appointed to ASX 200 boards. We have included a copy of the Charter
following this update. We will be discussing how we promote this widely at a
workshop being hosted in July. If you are a NED of an ASX 200 company and
would like to sign up to the Charter, please contact Rhian Richardson, Board
Diversity Manager at the AICD.
Deloitte Digital is hosting a strategy workshop in early July to help the Club
develop the marketing and engagement plan for the next 12 months. We have
invited individuals with deep audience engagement experience, particularly
digital expertise, to contribute to this workshop.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
This will ensure the Club reaches not only our target
audience (ASX 200 chairs and NEDs) but also interested
professionals to influence and advocate on our
behalf. Information regarding this workshop will be
communicated in the next quarterly report.
Lastly, we now have 71 ASX 200 chair members
representing 83 ASX 200 companies. Our chair members
represent current and past ASX 200 companies. We
would like to achieve at least 100 chair members by the
end of the year. This will require our continued focus and
many conversations between the members of our chair’s
liaison group and the unsigned ASX 200 chairs.
“We currently have 71
ASX 200 chair members
representing 83 ASX 200
companies. Our chair
members represent current
and past ASX 200 companies
and chair roles.”
To view our current Chair members and learn more about the 30% Club, please visit the 30% Club website at 30percentclub.org and the Australian chapter
page at 30percentclub.org/about/chapters/australia. If you would like further information on the 30% Club or would like to support the Club in some
capacity, please contact the Board Diversity Manager at AICD, Rhian Richardson at [email protected]
companydirectors.com.au
Charter for non-executive directors
as affiliates of the 30% club
The 30% Club vision
1. Board composition and recruitment
“Our objective is to achieve 30% of
ASX 200 seats held by women by end
2018. Gender balance on boards does
achieve better outcomes.”
Create chair as champion: The chair of the board has the key role in board
member selection. Appointing a women chair could be the key driver in
increasing female representation on the board. Alternatively, a NED can educate
the chair and provide advice on the value of diversity and the means by which
diversity can be achieved, which will include the following charter. The 30% Club
website lists the current ASX 200 chair members. Reference to their support may
also help in spurring other chairs to action.
The 30% Club wishes to extend
its membership to non-executive
directors (NEDs) who are willing
to implement this code of practice
and/or willing to promote it within
their own spheres of influence and
boards.
This Charter refers specifically to
board composition of the top 200
ASX companies and the influence
NEDs on these boards can assert to
bring about diversity in Australian
businesses.
Diversity goals: Each board should have a diversity goal. The 30% Club has
established a goal of at least 30 per cent of board roles to be occupied by women.
The diversity goal should be expressed in the objectives of the board and
measured through the annual board review process. Board succession planning
usually allows time to plan and therefore time to identify women with skills and
experience relevant to the role who can be considered through board selection
and interview processes.
Move beyond who you (and your board colleagues) know: Board
renewal processes can often be simplified to seeing who board members know
and directing search firms to reference these potential candidates and their
availability. Best practice involves use of external search firms to prepare long
lists and short lists consisting of 50 per cent female candidates. To meet the 30
per cent plus target, boards must challenge the search firms to compile ‘women
only’ short lists.
Skills matrix: Although not a skill, gender can be considered in the skills matrix
that the board conducts, as a consideration in developing diversity of thought
amongst board members.
Go beyond conventional corporate experience: Historically it has been
difficult for women to achieve the seniority in corporate roles that have been
traditionally viewed as essential for a NED role. Challenge yourself and your
colleagues to think whether you really need another corporate finance director,
lawyer or ex-CEO? What skills and attributes are really needed on the board to
ensure the future sustainability and continuous improvement of the board?
Provisions for succession planning: When a female board member is retiring,
ensure a female replacement is appointed, yet go beyond just replacing female
directors and appoint additional female directors to increase the representation to
at least 30 per cent.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
2. Motivate and include female board members
“Be sensitive to
Mentoring and support: Provide appropriate support, in particular to firsttime or new women NEDs to give them the best chance to succeed.
culture, behaviours
Induction: Ensure induction and ‘onboarding’ processes help women NEDs
settle quickly into their roles.
and bias that
3. Be sensitive to culture, behaviours and bias that reduce the
effectiveness of the board’s work and decision-making and be
confident to bring these to the attention of colleagues
Culture and values: Promote a psychologically-safe environment in the
board and senior management team to prevent bullying or intimidating
behaviour. Create a nurturing and inclusive environment that enables each
director to speak openly and honestly.
Respect and trust: Understand that boards and management must work
respectfully and with trust, and be prepared to make colleagues aware of
behaviour that reduces that respect and trust.
Conscious and unconscious bias: In all decision-making it’s not just a
matter of addressing unconscious bias, it is also a matter of being conscious
of the bias that you will naturally bring to the table and to biases that others
may bring.
4. Apply consistent organisation-wide consideration to diversity
Company wide diversity practices: Provide oversight of the company’s HR
practices and rigour in recording and reporting to maintain the momentum
around diversity in the organisation’s workforce. Identify the diversity
practices of leading companies in diversity and request they be applied in
your company.
6. Embedding the charter
We will periodically review the effectiveness of this charter and
progress towards improving board diversity and recommend changes as
appropriate.
For further questions on the code, contact the code’s author Susan Oliver, NonExecutive Director on [email protected]. To sign up to the charter contact
Rhian Richardson, 30% Club Executive on [email protected]
reduce the
effectiveness of the
boards work and
decision-making
and be confident
to bring these to
the attention
of colleagues”
companydirectors.com.au
How do we move the dial on diversity?
KPMG research found that 5 per cent of ASX 100 companies had
female CEOs in 2011 – five years later that number hasn’t changed.
Laura Coughlan
Manager,
People Advisory
In 2011 the ASX Corporate Governance Council introduced diversity
recommendations – in part of its Corporate Governance Principles and
Recommendations, recognising that corporate diversity isn’t just good
governance, it’s good for business. KPMG research1 shows improvements over the
last four years in the proportion of women at an organisational, senior executive
and board level, albeit the rate of change in some instances has been slow.
The graph below shows changes in the proportion of female representation since
the introduction of the diversity recommendations.
Female Representation - ASX 200
20%
22%
26%
Senior Executive
Ben Travers
41%
37%
35%
Organisation
2012
2013
2015
Partner,
People Advisory
The research also identified that the majority of diversity policies extend to areas
beyond gender, including age, ethnicity, religion, sexuality, disability and parental
status. The graph below outlines the beyond gender areas most frequently identified.
Beyond Gender Diversity
89%
88% 87%
88%
88% 89%
68%
61%
54%
63%
51%
42%
68%
60%
49%
47%
45%
23%
1
“ASX Corporate Governance Council Principles and
Recommendations on Diversity: Analysis of disclosures
for financial years ended between 1 January 2015 and
31 December 2015”, KPMG 2016
Religion
Sexuality
Disability
S&P/ASX 200
Age
ASX 201-500
Parental Status
ASX 501+
Ethnicity
15
16
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
Women at senior executive level
Increases in female representation at the senior executive
level have been regimental – 2 per cent per annum since
2012. While this progress is a small step in the right
direction, we think it’s important to examine which roles
have increased, rather than just the overall increase.
The graph below breaks down, by role, changes in female
representation in ASX 100 companies since 2011.
“...female representation
continues to be concentrated
to certain roles – HR,
marketing and legal.”
S&P / ASX 100
CEO
CFO
2011
5%
6%
8%
COO/Deputy CEO
Head of Business Unit
10%
5%
12%
CIO/CTO
19%
29%
GC/CoSec
33%
39%
HR
26%
Marketing/Corporate Affairs
CRO
Other
2016
7%
9%
58%
64%
33%
11%
13%
Our analysis shows female representation continues to be
concentrated to certain roles – HR, marketing and legal.
Female representation at CEO level has remained stagnant
at 5 per cent while female representation in traditional
CEO feeder roles, such as COO, deputy CEO and CFO have
either experienced no change, or even a slight decrease.
It was encouraging to see notable increases in the
proportion of women in CIO and head of business unit
roles. While the overall proportion of women at head of
business unit level remains comparatively small, female
representation in these roles has more than doubled in
the last five years. This increase indicates that at least the
pipeline for CEO feeder roles such as COO and deputy CEO
are showing the first signs of improvement.
Achieving meaningful improvements in diversity at the
senior executive level will undoubtedly take time, after
all the lead in time for initiatives such as sponsorship and
mentoring programs are not going to manifest overnight.
More than four years since the diversity recommendations
were introduced, we expected to see more progress in
female representation at the most senior levels (i.e. CEO
and CFO), particularly in the ASX 100.
The current lack of female representation at the most senior
operation levels will have a knock on effect at the board
level. For example, our review of board skills matrices
demonstrated that one of the most frequently sought after
board skills is “leadership experience” i.e. other board
experience or CEO, head of business or CFO experience.
If there continues to be a lack of female representation
in operational roles at senior levels there will not be a
sufficient pipeline of talent at the board level.
Women at board level
The AICD set a target of 30 per cent female representation at
NED level in the ASX 200 by 2018. Currently, 26 per cent of
NED positions in the ASX 200 are held by women, indicating
the AICD target is achievable, even though some companies
continue to do the heavy lifting on behalf of others, with a
number of companies still having no women on the board.
One important question is – what is the next step once
the 30 per cent target is achieved? In the UK, Lord Davies
and the FRC set a target of 25 per cent female board
representation by 2015. Having achieved this, Lord Davies
revised the target to 33 per cent by 2020.
companydirectors.com.au
Achieving meaningful improvements
The latest edition of the diversity recommendations
introduced the requirement for companies to set and
disclose measurable objectives for improving diversity.
Our research indicated that the majority of entities had not
set, or at least did not disclose, quantitative objectives for
improving diversity. Most “measurable objectives” focused
on the implementation or maintenance of gender diversity
programs or initiatives such as undertaking a pay equity
review or rolling out training in unconscious bias.
The lack of quantitative objectives was particularly
evident in areas beyond gender. A minority of companies
disclosed that they were undertaking further analysis to
develop beyond gender measurable objectives but, in most
instances, measurable objectives for beyond gender had
not been considered.
Initiatives are, undoubtedly, essential steps to achieving
sustainable improvements and, importantly, to increasing
diversity in senior operational roles. However, by the
fourth year of reporting we expected more companies,
particularly in the ASX 200, would have set numerical
targets around their diversity objectives.
Time for targets
A number of companies have adopted the Male Champions
of Change approach by introducing “targets with teeth”.
Linking diversity to executive incentives sends a clear
message to participants and the market that the company
is serious about achieving meaningful improvements in
diversity, at all levels of the organisation. Importantly, this
approach places the onus for improving diversity on the
shoulders of the organisation’s leaders and demonstrates,
from the top down, that a culture of diversity and
inclusion is a key company value.
Every company will have different short and long-term
diversity objectives but, in our view, what gets measured
ultimately gets done. This doesn’t mean every company
needs to set a target to increase female representation at
senior executive level to 40 per cent by 2017 or on the
board to 50 per cent by 2018 – although these might be
appropriate long-term goals. Instead, the focus should be
on setting quantitative targets in the shorter term that will
support the achievement of long-term goals. These targets
should be used to help identify the effectiveness of various
initiatives that the business has put in place.
Numerical targets should be set at different levels of the
organisation and form part of the succession planning
process to ensure an effective pipeline of talent is coming
through the business.
“Numerical targets should be
set at different levels of the
organisation and form part
of the succession planning
process to ensure an effective
pipeline of talent is coming
through the business.”
By incorporating target setting within the succession
planning process, the pipeline of talent can be better
supported to achieve success. For example, opportunities
to provide P&L experience to high potential individuals at
an earlier stage in their career can be identified. This would
address one of the key barriers to increasing diversity in key
operational roles where P&L experience is a prerequisite.
What next?
Diversity will continue to be a hot topic, both in business
and society more broadly. The statistics show we’re taking
small steps in the right direction, but there is still a long way
to go. In our view, the way in which we can move the dial
on diversity is to elevate the current discussion to one that
focuses on leadership and capability. Embracing and valuing
differences, whilst recognising common ground, provides
an opportunity to build a leadership team to deal with a
changing business landscape and best meet customer needs.
The business benefits of diversity, both gender and
beyond, are increasingly being identified by investors and
forming a part of the investment decision. By focusing on
leadership and capability, and ensuring a robust succession
planning process, a diverse leadership team can be formed
to lead the business in a constantly evolving environment.
17
18
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
Interview with a Chair:
Michael Hawker
Chairs, NEDs and CEOs often speak of having a ‘lightbulb’ moment
regarding diversity. Did this happen to you?
Michael Hawker AM FAICD
Chairman,
The George Institute for Global Health
Past Chairman,
Australian Rugby Union
Non-Executive Director,
Macquarie Group Limited
Non-Executive Director,
Washington H Soul Pattinson
and Company Limited
Non-Executive Director,
Aviva plc
This didn’t happen to me. My first business role was at Citigroup, a diverse,
global organisation. At that time everyone was treated equally, regardless of
gender, race, religious beliefs etc. If you did the job well you were rewarded. I
also travelled regularly to other Citigroup offices and diversity in its broadest
sense was the norm. There were a high number of senior women that worked
for the company, everywhere I went. Therefore, being my first employer, I took
diversity for granted. When I joined an Australian organisation 12 years later,
I was shocked at the difference in the culture and structure. The organisation
was more hierarchical and male-dominated. It needed a massive adjustment.
You appointed three women to the board of the Australian Rugby Union
(ARU) from zero when you became Chairman. Was this seen as a bold move
at the time?
I didn’t see it as a bold move and there was real appetite for this change on
the board. We had moved through a significant constitutional change which
amongst other changes required that all directors be independent nonexecutive directors, other than the CEO, who is the only executive director.
This enabled us to go through a proper process of finding individuals that had
the requisite skills and to create a board which had a combination of skills that
provided the best opportunity of ensuring the organisation’s competitiveness
in the future. We looked for individuals that possessed strong governance skills
as well as a mix of complimentary professional experience and to span different
generations. We also wanted a critical mass of individuals that possessed deep
knowledge of the sport, so currently there are four directors that played high
level rugby and who have also ran companies.
Clearly we wanted gender diversity, as women pretty much make all the
decisions as to what sports children play, how families and couples spend their
social time and we have a lot more women wishing to play sevens and noncontact rugby. We also wanted to dramatically grow the sport, to give new
participants the same opportunity to experience the benefits that many of us
received from rugby – such as the personal values learnt from team sport, the
opportunity to travel and meet people from vastly different backgrounds.
It makes logical sense to have a diverse board to not only bring the skills you are
looking for but also to represent your fan base and the decision-makers in terms
of future players of the sport.
To me, diverse boards are about providing different cognitive frames of reference
to give you the capacity to best handle the future of the business you are
running. Sport is entertainment, it’s competitive and it’s global. You need a bunch
of high-quality people with great experience and who have a complex array of
complementary skills and perspectives.
The Women’s Sevens Squad is a strong contender for the gold medal at
the Rio Olympics. What do you think the ARU has done particularly well to
foster their growth and success? What else is the ARU doing to encourage
women and girls to play rugby?
We actively went out and recruited people from different sports to join sevens.
We applied a separate team from within the game to manage the women’s
Olympic team hiring a great coach and sports management team and with
separate funding and support from the ARU. That wasn’t easy as the Australian
Rugby Union has been operating on a shoestring, so it required squeezing other
priorities to create the resources required to get them up and running. It is still
not enough support, and we are very grateful for the personal sacrifices many
of these very talented women have made to get them to this stage – currently
the number one Women’s Rugby Sevens team in the world – and they deserve a
gold medal at the Olympics.
We have worked hard to ensure the team felt a part of rugby within Australia.
We have worked closely with the traditional 15-a-side clubs to promote
sevens within their clubs. We moved sevens to be a summer sport so club
infrastructure could be utilised all year round. We also created a non-contact
game of sevens rugby to get people to come along on Friday nights throughout
the year including the summer, to play some sport and experience the
atmosphere surrounding club rugby. This enables people to try the game before
they move to the contact game, should they wish to. So we focused on building
and fostering Sevens Rugby (both women’s and men’s) from a structural point
of view, providing the support needed to grow the game. We also worked
with the women in the sevens team in a marketing capacity to help people
understand that there are opportunities for young women and girls to play
rugby. We tried to influence the clubs to be more diverse in their thinking. This
cultural change will take some time as the clubs have been male-dominated for
so long. Unless you set the tone from the top though, nothing will change.
What do you feel is the legacy you have left at the ARU since stepping
down as Chairman at the end of 2015?
I have been very fortunate to have found a great group of people who have
been passionate about improving the circumstances of rugby within Australia
and internationally. Firstly, we were trying to ensure financial sustainability –
which we have achieved for the next few years. Secondly, we wanted to update
the governance structure of the game and to try and help align all the interests
within rugby to a common direction.
companydirectors.com.au
“ To me, diverse
boards are about
providing different
cognitive frames
of reference to
give you the
capacity to best
handle the future
of the business
you are running.”
19
20
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
“ For me it is all
about cognitive
diversity, which
typically comes
from all forms of
diversity; there
is racial, age,
gender, experience,
vocational etc.”
This required a complete overhaul of the Constitution, a new Board of Directors,
a new membership structure, a revised strategy to grow participation in the
sport, involving investment in new systems, new forms of the game, third party
monies, and to make clearer the decision making accountabilities throughout
the sport. Thirdly, we wanted to improve the competitiveness of our National
sides, and I am pleased that by the end of last year, the Australian Wallabies
had moved to No. 2 spot in the World under the very capable hand of coach
Michael Cheika (although clearly No.1 would be better), and both our Sevens
teams qualified for the Rio Olympics. Lastly, we were trying to restructure the
game to build the game for the future both nationally and internationally. We
were always trying to consistently engender the global values of the game.
We made progress in each of these areas. Of course it is a constant and ever
changing journey but there is a great management team at the ARU that is
continuing this progress and implementing initiatives to attract a broader
audience to the game.
In your role as CEO & MD at IAG you increased the number of women on
your executive team to four out of eleven. Did you need to actively seek
women out for these positions and convince them that they were ready or
do you think the confidence issue (i.e. women not being confident enough
to nominate for senior roles) is exaggerated?
A combination of both; some women that I wanted to move, were happy to
move immediately, some did not, for various reasons. But in nearly every case I
was able to convince them to move into the roles at a later date. I think the view
that you can’t find women on merit is complete garbage. It is easy to find women
if you have them as part of the selection criteria or you only have all-female
short lists. If you say you always pick the ‘best’ person for the job and that
always happens to be a male, then in my view you are biased. There are a lot
of very competent women out there, don’t tell me it is impossible to find them.
I also think you need to get a critical mass of women on the board and within
the executive team. It is very unfair for one person that has a different frame of
reference to everyone else; to have to be the constant lone voice. You can’t push
your different frame of reference the whole time, yet the board needs differing
views, as without diversity the board and senior leadership teams’ perspectives
aren’t broad enough. For me it is all about cognitive diversity, which typically
comes from all forms of diversity; there is racial, age, gender, experience,
vocational etc. You definitely want gender diversity however as women are
obviously approximately 50 per cent of the population and often the primary
consumers and influencers.
Did you notice a change in the working culture when more women joined
the executive team?
Yes absolutely. There are some simple things that changed, such as the language
used and conversation topics. But far more materially, a higher number of
women in the organisation in senior positions led to far broader discussions.
Women bring different ideas and ways of solving problems, ensuring a higher
level of professionalism and greater degree of complex thinking. In my
experience, working with women gave me stronger insights into the risks of the
business, concerns employees might have, and how to improve customer service
and loyalty.
When I ran the retail bank of Westpac, I mandated to have a certain number of
women at different levels. It is amazing how quickly change happens when you
mandate it. If you implement change at the higher levels, it changes the cultures
underneath. I’ve always worked with women and I think you achieve a more
balanced view of things. I’m always looking for the differences people bring. I
don’t want the same view presented back to me; I want people that represent all
our various stakeholders.
What do you think has been the most important factor/s in facilitating
women’s participation in executive and director roles?
Three things: firstly making it totally clear that you, as their manager have total
faith in their capability and that they have your unwavering support. Secondly,
that you as the boss create an environment that is inclusive, friendly and not
hostile. Thirdly, you need to improve the language and conduct. I like having
robust discussions, but I hate when people start attacking individuals. Attack
the issue, not the person. You need to foster that sort of working environment
and to encourage and respect alternative perspectives. This leads me back to
my earlier point, to ensure there is a critical mass of women so there is safety
in numbers. You want people at the table who bring their frame of reference
and you don’t want that stunted by misogynistic or negative behaviour. That is
critical. You need an inclusive environment to foster diversity. You also need to
ensure people feel respected and that their views will be heard.
You have been and are currently on boards with some strong diversity
advocates such as Ann Sherry AO and Patricia Cross. What have you learnt
from them?
Ann Sherry I have worked with for over 20 years both in executive roles and in
non-executive roles and she has taught me a lot. Patricia, I have known of for
a longer time frame but have only had the opportunity to work directly with
her over the past three years. Both women are hugely capable and successful
business people and are passionate and sensible advocates for greater diversity.
But I have also been very fortunate to have worked with a very large number of
very capable female executives, and to single out just a couple would be doing
them a disservice. I look at working with people as a learning experience and I
try to learn from all individuals – men and women, locals and internationals – I
don’t single out any individuals. We can learn both good and bad things from
everyone. There is always something to learn, if you have a view that you can’t
learn anything then it is probably time to retire. In building teams of people
or joining a team of people, I want to work with people that I respect, that
are doing a great job, bring complimentary skills and that have different life
experiences to me. I want them to be able to test my own assumptions.
companydirectors.com.au
“ Women bring
different ideas and
ways of solving
problems, ensuring
a higher level of
professionalism
and greater
degree of complex
thinking.”
21
22
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
“ We need to
focus on gender
diversity because
in my view
it’s good for
business, and it’s
good for society.”
What do you think needs to happen to ensure women are reaching their
potential in both the executive and director environment?
Firstly, you need to get to that critical mass. I strongly view 30 per cent
as the minimum in terms of a critical mass. You can do this over a 3 – 5
year timeframe without any problem in most businesses. Secondly, it is the
leadership – the competence of the leaders in providing a supportive and
gender-neutral or unbiased workplace. This will foster a diverse group of
people. I like unconscious bias training as we all have a natural instinct to
choose people we know and trust. Thirdly, you have to ensure your actions
replicate what you are saying. I have summarily fired many senior executives
for inappropriate behaviour. And finally, you have to keep at it; this is
cultural change which is hard, and takes time – for many it is a risk they don’t
want to take.
If you want more women, you can easily get more women, it isn’t difficult. Find
headhunters that are on your wavelength. If you create a highly structured
search criteria of whom you want and the skills you want, then in many cases,
you will inadvertently limit the potential pool of applicants . Finding the “right”
person is always a trade off of attributes you desire. In my view, you are really
evaluating only four key attributes – someone with the right cultural values,
a proven history of competency needed for the role, capacity to deal with
the level of complexity of the role, and the “right” temperament for the role.
Clearly each one of these attributes have a whole slew of further attributes
within them. You are always trading off some strengths in some of these with
weaknesses in others; if you weren’t then you would be looking for the perfect
person for years. A good Search Consultant will understand the trade-offs you
may make to get the “right” person. I don’t believe any of these attributes are
limiting factors for diversity. If you really want a woman for diversity reasons,
then only have women on the shortlist.
Do you have any final comments or insights you’d like to share?
We need to focus on gender diversity because in my view it’s good for business,
and it’s good for society. To me, it is all about having respect for other people.
Understanding people with different frames of reference enables you to be
most effective in whatever endeavour you are pursuing. If you limit all forms
of diversity then I can’t see how you can be as competitive or as competent in
what you do. In my opinion, embracing diversity should be the status quo.
companydirectors.com.au
The talent pipeline from classroom
to boardroom – women in STEM
STEM (Science, Technology, Engineering and Maths) is a hot topic of
interest across the country and around the globe.
Samantha Martin-Williams FAICD
Non-Executive Director,
Newcastle Permanent,
Non-Executive Director,
Salvation Army Advisory Board
Non-Executive Director,
Newcastle Permanent Charitable
Foundation Ltd
There is interest in the teaching of science, technology, engineering and
mathematics (STEM) subjects from pre-school to post-doctoral. The importance
of developing STEM skills now to prepare for the future as jobs and economies
continue to evolve and change is another area of interest. Further, gaining a better
understanding of the interaction between schools and industries to improve the
pipeline of a STEM-skilled workforce captivates others. At a strategic level, a
significant amount of intellectual effort has been invested in making the case for a
national STEM strategy and how STEM assists innovation to deliver solutions.
Clearly without some boundaries this conversation can quickly lose focus. For
now, I will concentrate on the talent pipeline for women who know STEM and
the opportunities this cohort presents to boards.
Statistically more women are studying STEM subjects however, it remains
clear that the progress is sluggish and the challenge to attract retain and
promote female talent is as multi-layered and complex as ever. That said, the
statistics emphatically show that the quality of female scientists, engineers
and mathematicians is not the issue. Girls outperform boys at secondary school
level. Growing numbers of outstanding women go onto postgraduate study and
high calibre female candidates for board positions are appointed to ASX-listed
and government entities.
Hence, it would seem worthwhile exploring whether it is the STEM sector and
its employers that need to change to attract and retain this rich and under
exploited potential. Positive change will encourage more girls to study STEM
subjects and help them to remain energised and engaged to pursue fulfilling
careers that benefit themselves, their organisations and the economy.
With the race on to attract more girls and women into the talent pool, proven
programs in Australia are driving the necessary cultural and workplace changes
that will support the attraction and retention of more girls (and boys) in
STEM. One such program producing excellent results is Regional Development
Australia (RDA) Hunter’s STEM initiative, the ME Program. The Hunter region
of NSW starts about 120km north of Greater Sydney, stretches along east
coast surf beaches to Foster and inland where grapes grow, wine is produced,
thoroughbred horses are nurtured and resources mined.
I am a proud program ambassador and advocate for women in STEM for the region.
23
24
GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
RDA Hunter’s ME Program – A talent pipeline blueprint
The ME Program is an industry-led, STEM-focused, skills
and workforce development program. The ME Program is
creating and promoting opportunities for girls and boys to
help shape their education and work experience towards
sustainable and fulfilling career paths. After all, for more
women to be in STEM, one proven pathway is to have more
girls start the STEM journey.
At an operational level, the ME Program uniquely links
high schools from all sectors, State, Independent and
Catholic, with industry partners, which not only makes
curriculum more interesting but demonstrates how these
subjects are workplace-relevant. The goal is to provide
industry with a larger pool of STEM-qualified, motivated
and career-aware candidates. Since the ME Program
commenced it has engaged over 8,000 students in STEM.
The key to the Program from my point of view is that
it’s grounded in close consultation with education and
industry stakeholders. Classroom STEM learning and extra
curricula activities at smart schools are combined with
vital on-the-job work experience, delivered by a range
of Australia’s leading industries. This model may also be
known as Work-Integrated Learning (WIL).
The Program is targeted at students from years 7 to 12 and
has successfully increased the number of students, particularly
girls, undertaking science, technology, engineering and
mathematics subjects in participating schools. The Hunter was
behind the State average for enrolments in HSC Physics and
Engineering Studies before students were engaged through
the ME Program. Now, the Hunter region exceeds the state
averages in these subjects as shown below:
Girls (and Boys) like ME
•17 per cent of students at ME Program smart schools
select HSC Physics compared with the NSW average
of 14 per cent.
•HSC Engineering Studies is selected by 12 per cent of
ME Program students compared to a state average of
4 per cent.
•14 per cent of ME Program students select HSC
Metals and Engineering Certificate II compared
with a 3 per cent state average.
ME Program’ Hunter high schools compared to NSW average 2010–2014
By engaging individuals with STEM, they are equipped
with technical skills and knowledge to help them make
informed education and career choices.
Local industry leaders welcome the opportunities to invest
in their future workforce by engaging with students in
ways that complement their recruitment initiatives.
BAE Systems Australia has a major site in the Hunter
region and is one of the ME Program’s valued industry
partners. BAE Systems has a back story that dates from
testing the first generation air defence missile systems
in 1953. Now, as one of Australia’s largest defence
companies, BAE Systems offers the Australian Defence
Force (ADF) and security customers total capability across
the aerospace, land and integrated systems, maritime and
logistics domains.
Along with BAE Systems, another 31 industry partners
now engage with 32 Hunter high schools. When the ME
Program commenced in 2010, there were four high schools
and four industry partners.
What also excites me about this Program is the
development of innovative STEM curriculum and
resource materials, which is facilitated through the ME
Program’s Living Toolkit project. Through a creative
approach to designing imagination-capturing teaching
materials, the Living Toolkit supports teachers to deliver
better quality education.
The Living Toolkit also has resources to support ME
Program’s iSTEM course. This School-Developed Board
Endorsed Course (SDBEC), was developed in consultation
with Maitland Grossmann High School (where I am an
alumna) and local industry. When the Board of Studies
Teaching and Educational Standards NSW (BOSTES)
endorsed the curriculum in 2014, seven high schools
offered iSTEM as an option for their students. As of
May 2016, 85 high schools deliver iSTEM allowing their
students to integrate their learning knowledge with the
pillars of STEM.
Together with core subjects, including Mathematics,
English, Science, Information and Communication
Technology and Engineering Studies, iSTEM provides
the foundations for pursuing 21st Century career
opportunities. This is one reason why the uptake of
iSTEM by schools has far exceeded expectations.
companydirectors.com.au
RDA Hunter is also partnering with local companies to
extend STEM teaching to primary schools, through the
MiniME Program. This is yet another example of an
opportunity for collaboration in this area to help us meet
the challenges of the future.
Jobs of the future
Forecasts of 40 per cent of the current workforce having
their jobs done by computers in the next decade or two
should focus our minds on finding solutions. Looking at
current trends, 75 per cent of the fastest growing jobs in
Australia require STEM knowledge and skills. Australia is
not producing enough workers with these skills.
“Looking at current trends,
75 per cent of the fastest
growing jobs in Australia
require STEM knowledge
and skills. Australia is not
producing enough workers
with these skills.”
In Australia 15 per cent of the working age population
have a STEM qualification. Australia is not alone on the
world stage of efforts to harness the technological and
innovative advantages that a STEM education can bring.
This is another reminder that we need to think globally.
Education is central to solving this conundrum. The
managers of RDA Hunter’s ME Program talk about future
developments of their program in the Smart Specialisation
Strategy for the Hunter Region, which was launched by
Prime Minister Turnbull in March this year.
These developments include:
“… educating more students in entrepreneurialism
and business acumen, for professions and trades; and
extending digital literacy which encourages businesses
to embrace digital transformation as a foundation for
growth and development. STEM, entrepreneurship
and digital literacy form an essential bundle of skills
to address changes in demographics, economies in
transition and for the workforce to be equipped for the
globally competitive jobs of the future.”
A Deloitte Access Economic survey of employers
conducted for the Office of the Chief Scientist found
STEM qualified staff are: 1. valuable to business, even in
positions where the employee’s qualifications (major field
of study) is not a perquisite for that role; 2. “among their
most innovative”; and 3. “able to adapt to changes in the
business.”
STEM qualified employees were perceived by employers to
have higher level skills in areas such as complex problemsolving, critical thinking, programming as well as system
analysis and evaluation. These employees did not rate
as highly for interpersonal skills and time management,
which suggest opportunities to further round-out STEM
education.
The potential for STEM educated women to contribute
to boardrooms has been largely untapped. As the nation
grapples with a STEM strategy the most fruitful outcomes
will come from a focus on the talent pipeline from
classroom to boardroom. Investing in girls to get a start in
STEM subjects and for women to stay engaged in STEM
research and related careers are key parts of the goal
to increase the number of female candidates for board
appointments.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
Journeying towards 50%
women in leadership
When 60 per cent of your workforce are women, as are millions of
your customers – there’s a clear and direct benefit in having a gender
equality ambition.
Ainslie van Onselen
Director of Women’s Markets,
Inclusion & Diversity,
Westpac Group
This is certainly the case for Westpac Group. Only 33 per cent of our leaders
from the CEO to bank manager level were female when we set our first target in
2010 at 40 per cent Women in Leadership (WIL). We achieved it early in 2012
through a considered approach and using this positive momentum, we then
became the first bank to publically commit to the bold aspiration of having
50 per cent WIL by 2017, the year we celebrate 200 years in business. We’re
currently at 46 per cent and are on track to achieving it.
However, women have played a key role at Westpac since the start of our
business. As Australia’s first company and first bank, Westpac employed the
first female bank teller in Australia and our first landlord was a women, Mary
Reibey, who is the profiled Australian on the $20 note. We had the first female
general manager, the first female group executive and the first female board
member of all the major banks and we remain the only bank of the big four
banks to have had a female CEO, Gail Kelly. We were also the first bank to set
up a dedicated business unit for female customers which is represented by our
Ruby brand and through our rubyconnection.com.au website.
This series of powerful firsts are individual parts of a bigger and long-standing
focus on inclusion and diversity at Westpac Group. However, our experience
shows there is no one single solution for increasing the participation of women
as customers or employees or in advancing their career and financial prospects.
It has to be a systemic and built-in approach.
There are, however, three clear success factors that have resulted in our
forward tracking from 33 per cent to 46 per cent in six years. These are:
1. Make it a key business priority with leadership support;
2. Creating a cultural shift; and
3. Demonstrating a strong commitment for empowering women.
companydirectors.com.au
1. Make it a key business priority
with leadership support
Westpac Group’s focus on WIL is included as part its
broader inclusion and diversity strategy based on the
supporting imperatives of:
•Creating an inclusive culture: We value the
uniqueness of our people and use this value to create a
competitive advantage.
•Attracting, growing and retaining unique talent:
We attract, develop and retain diverse individuals to
maximise performance and adapt to market changes.
•Connecting with our diverse customers: We create
meaningful relationships with our diverse customers to
deliver superior service and products.
•Engaging communities and the market: We engage
with our diverse community in everything we do to
create a sustainable future for all Australians.
cent for general managers by 2017 and 30 per cent for
the Westpac Group board. He has also signed up as a Pay
Equity Ambassador CEO through the Workplace Gender
Equity Agency (WGEA), to encourage all leaders to make
this a priority.
Progress on WIL is regularly reviewed by Westpac Group’s
Inclusion and Diversity Executive Council chaired by the
CEO, and made up of members of the executive team.
Meeting quarterly, the council’s role is to ensure inclusion
and diversity goals are integrated into Westpac’s Group’s
business strategy, and keep track of how initiatives
and the WIL target are progressing. This is supported
by Inclusion and Diversity Councils across each of the
business units which in turn set goals and prioritise
initiatives, ensuring our entire business is accountable for
inclusion and diversity outcomes. This robust governance
structure at key leadership levels and commitment for
change are critical success factors in helping us achieve our
WIL target.
2. Creating a cultural shift
“T he 50 per cent WIL
aspirational target is set in
our CEO’s and each of his
group executives’ KPIs.
This means that all of our
business units are working
together on achieving it.”
Further, the 50 per cent WIL aspirational target is set
in our CEO’s and each of his group executives’ KPIs.
This means that all of our business units are working
together on achieving it. We’ve also established several
mandates that support our WIL program – such as that
50 per cent of candidates on interview shortlists have to
be female; ensure 50 per cent female participation on all
high potential and core leadership programs and having
a 50 per cent graduate female intake. In 2015 under CEO
Brian Hartzer we also introduced a WIL target of 40 per
The cultural change we’ve created around gender equity is
delivered through the soft-wiring of a range of initiatives
such as Westpac Group’s annual International Women’s
Day program. This year, for example, we celebrated it
through the theme of “Pledge for Parity”. We held 60
events around the country and internationally. To bring
thought leadership and outstanding female role models
to our customers and employees, we held a key signature
event for 1,400 people at ‘The Cutaway’ in Sydney’s
Barangaroo, featuring a keynote address from The Hon.
Julie Bishop MP, Foreign Minister and a panel facilitated
by our CEO Brian Hartzer with guests Julie Bishop,
Ann Sherry AO Executive Chair Carnival Australia
and Michelle Payne, the first female jockey to win the
Melbourne Cup.
We’re also actively recognising outstanding Australian
women. Our landmark 100 Women of Influence Awards
program, run in partnership with the Australian
Financial Review, is committed to increasing the visibility
of women’s leadership, highlighting the important
contribution women make in creating a bold and diverse
future for Australia. The internal Women of Influence
Awards program recognises our own female employees
who are making an outstanding contribution to our
business, customers and local communities.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
From a talent development perspective, our Women of
Westpac Employee Action Group has over 2,400 members
(both women and men) and empowers its members
to make confident career choices through education,
information and networking opportunities. In 2015 we
launched the Equilibrium program which is designed to
bring female leaders from other industries into the
banking and finance sector. This has been incredibly
successful in helping us source diversity of thought in
our business while contributing to our WIL aspiration
and we are running another intake this year.
As a leading employer of choice, we also provide
assistance to employees who have parenting and other
carer responsibilities through our Carers@Work program.
Run by Parents@Work, the program consists of an
information portal and monthly workshops, and career
coaching for parents in the WIL population.
3. Demonstrating a strong commitment
for empowering women
As a bank, hard-wiring change ensures we contribute to
the financial empowerment of women. For example, we
were one of the first publically-listed companies to provide
paid parental leave, which had flow on affects throughout
corporate Australia. We followed this up by being the
first private sector company to pay superannuation
on unpaid parental leave in 2010. This is an industryleading initiative which helps reverse the Australia-wide
retirement savings gap experienced by employees. We
have also increased paid parental leave to 13 weeks, and
introduced secondary parental leave for two weeks.
We offer flexible work arrangements to all employees
through our All In Flex approach, which ensures all our
40,000 existing roles globally are considered for flexible
working, as well as any new roles created. This was in
response to 89 per cent of employees (both male and
female) indicating in 2014 that they would require some
form of flexibility in the next three years. Currently 71
per cent of our employees work flexibly. We have a range
of flexible working options on offer as we know that our
people are juggling responsibilities and priorities outside
work that are important to them, such as family, study,
learning a new hobby or caring for dependants. Our
approach is that work is something you do, not a place
you go to.
“As a bank, hard-wiring
change ensures we
contribute to the financial
empowerment of women.”
We encourage regular team-based discussions between
team members and their people-leaders to design flexible
working solutions that work for the individuals, their team
and their customers.
In summary, while all this work is underway, we’re not
there yet. Our focus continues to be on what more we can
do to ensure we reach our aspirational target of 50 per cent
Women in Leadership by 2017. We’re also looking at other
initiatives to support women such as focusing on creating
solutions to support those who experience family violence.
The market has been giving us feedback that we’re on
the right track – by winning the 2015 Australian Human
Resources Institute, Most Inclusive Workplace Award and
maintaining our WGEA Employer of Choice for Gender
Equity Citation every year for over a decade.
Find out more about Westpac Group’s Inclusion and
Diversity strategy and outcomes westpac.com.au/aboutwestpac/inclusion-and-diversity
companydirectors.com.au
Incremental or transformational – it’s up to us!
Over the last decade, I have had the privilege to work with many
Australian businesses deeply committed to advancing gender equality.
Julie McKay
Julie is the Gender Advisor to the Chief
of the Defence Force, Chair of Women’s
College at the University of Sydney and
a diversity and inclusion consultant.
Until April 2016, Julie was the Executive
Director of UN Women’s National
Committee, a role she held for more
than nine years.
One of the most rewarding parts of my role as Executive Director of the UN
Women National Committee Australia was having the opportunity to spend
time with individuals in government, private sector organisations and other
advocates, who share my vision of a world where men and women share
leadership opportunities, have equal access to economic security and can live
free from violence. Despite the passion and will of so many, progress towards
gender diversity and inclusion has been painfully slow.
I am the first to admit that addressing gender inequality in our society is
complex and that no one program or strategy will solve the problem. However,
I believe there are four areas of opportunity for transformative change:
•Leadership accountability
•Addressing the myth of merit
•Genuine workplace flexibility
•Supply chain reform
Leadership accountability
Over the last decade, more business leaders have publically recognised the need
to address gender inequality in business and in society more broadly. During this
period, we have loudly celebrated incremental increases in the number of women
on boards, welcomed the ASX Corporate Governance Council’s recommendations
on diversity and celebrated the establishment of the Male Champions of Change.
Despite these ‘wins’ women remain seriously marginalised in our workforce,
especially when it comes to accessing leadership positions.
The ASX Corporate Governance Council’s recommendations sought to
engage companies in setting measurable objectives for achieving gender
diversity, presumably with the intent that these would be used to hold leaders
accountable for outcomes. KPMG’s recent analysis of 2015 ASX disclosures
demonstrate that while efforts have been made to articulate ‘objectives’,
they are rarely measurable or included in leadership KPIs. Examples of the
objectives being reported by the ASX 500 included developing flexible work
practices, conducting unconscious bias training and establishing female leader
networking opportunities.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
These activities are all useful parts of a diversity strategy
but none of them are ‘measureable outcomes’, if only for
the fact they are almost impossible to measure.
At their most basic, KPIs might measure the percentage
of women in a manager’s team. More mature approaches
look at both the numbers of women in different roles but
also at who leaders are currently mentoring, what events
the leader is actively supporting, separation rates for men
and women and the ratio of women shortlisted for roles
compared to hires.
I have never heard an ASX executive say that profit
margins or risk management should be excluded from
a leader’s accountability framework. Yet proposals
to include diversity KPIs have been resisted very
strongly indeed.
Addressing the myth of merit
Leaders will often remark that while they are committed
to diversity, decisions in their organisations are based on
merit, not on gender. While that makes sense on face value,
it is critical to unpack the subjective concept of ‘merit’ to
understand its impact on perpetuating gender inequality.
There are many examples which demonstrate the ‘merit
myth’ including the widely cited Heidi vs Howard study,
which has now been replicated across business schools and
workplaces. The study saw participants ranking the same
resume more favourably when Howard Roizen was the
candidate rather than when Heidi Roizen was the name
on the resume. Participants acknowledged that Heidi was
obviously well-accomplished and highly competent, but
were less likely to want to work with her or for her.
“Without targets and accountability measures for the
employment of women, women in senior leadership,
women on boards and pay equity, it is very unlikely
that real progress will be made.”
Without targets and accountability measures for the
employment of women, women in senior leadership,
women on boards and pay equity, it is very unlikely
that real progress will be made. Targets that are publically
announced, regularly reported on to the board and
where senior leaders are held accountable through their
performance review and bonus structures are effective in
driving change that is more than incremental.
The introduction of blind auditions for major symphony
orchestras in the US, where the player is hidden from the
judges by a screen, increased women’s chance of advancing
through preliminary rounds by 50 per cent. The New York
Philharmonic, for example, saw the proportion of women
rise from 10 per cent to 45 per cent of new hires once blind
auditions were implemented, ensuring judgment was based
on sound, not gender.
All boards should be including diversity and inclusion
targets in their CEO’s performance framework. Failure
to meet the agreed targets and drive the types of cultural
change needed should impact both on performance
and remuneration. Only by having the board assess
CEO performance on diversity metrics will there be a
change in senior leadership behaviour and fairer outcomes
for women.
Merit is some combination of past performance and future
potential. These examples highlight that the concept of
merit is in large part a subjective measure. Subjectivity
introduces issues of bias, ‘like seeking like’ and societal
norms and expectations overshadowing some candidates.
So when we say that decisions in our organisations
are merit-based, what we are essentially saying is that
leaders use their judgement to decide who is best suited to
certain roles and opportunities and pro-male recruitment
behaviours are likely to continue.
companydirectors.com.au
For companies that are serious about affecting
transformative change with regards to diversity and
inclusion, the idea that we can rely on some objective
merit process needs to be fundamentally challenged.
Some examples of how to overcome the ‘merit myth’
include introducing unconscious bias training for all
promotion and selection panels, reporting the statistics
about the number of women applying for roles, being
shortlisted and ultimately selected and designing strategies
to increase the numbers of women in the pipeline.
Overcoming the myth of merit requires leaders to step
up and acknowledge that the current process is impacted
by bias and that ‘cultural fit’ often disadvantages diverse
candidates. Leaders need to reshape the conversations
we have about merit to ensure that women do not face a
backlash when they are promoted, with claims that they
only got there because they were women.
key talent and trying to make work more flexible for
their own employees. Fear of losing clients impedes us
having honest conversations with clients. Where models
of flexible work have been effectively rolled out, there
simply isn’t the evidence base to support the fear that
levels of client service will decline. Explaining to clients
that their needs will be prioritised, the work will get done
and as a result of supporting a flexible workplace, they
can be assured of getting the best talent working on their
account, is an easy step that we often miss.
“Overcoming the myth of
merit requires leaders to step
up and acknowledge that the
Genuine workplace flexibility
current process is impacted
Despite most large companies now having flexible work
policies, uptake of flexible work arrangements remains
relatively low and far from ‘normalised’ in business today.
There is endless research that demonstrates that regardless
of someone’s actual performance, our perception of flexible
workers (including part-time workers) is that they are less
committed to their careers.
by bias and that ‘cultural fit’
Fostering and rewarding a culture where everyone in
the business works in ways that suits their personal
circumstances, role and preferences is critical to changing
our current mindset. The Workplace Gender Equality
Agency cites substantial evidence that demonstrates
that flexible workers and part-time workers are the most
productive workers in our organisations. In fact, if we
actually read and believed the research, we would never
again hire another full-time, always available, no visible
caring responsibilities ‘ideal’ worker again.
Renowned academic, Professor Marian Baird found that
one major barrier to flexible work was the lack of training
provided to managers about how to implement the policies
and support workers transitioning to flexible work (2010).
Without this education, Baird found that workers were
nervous to request flexible work options.
When discussing flexible work with leaders, often the
feedback I receive is that ‘the clients’ won’t accept not
being able to reach a team member when required. There
are two issues with this statement. Firstly it assumes
that someone who isn’t physically present in the office is
unavailable to clients, which is fundamentally not true
with modern technology. Secondly, too often it has not
actually been tested with clients, many of whom are
struggling with exactly the same issues of retaining their
often disadvantages diverse
candidates.”
Norms are set by the leadership, yet when employees
look up within organisations and see leaders frantically
running between meetings, booking their time 12 hours
a day, six days a week, they simply don’t believe that
flexible work is a real option if you want a career in that
organisation. There remains a significant gap between
our rhetoric on flexible work and our commitment to
implementing the policies.
If leaders were to do one thing differently in 2016, it
would be to require that their leadership teams worked
flexibly and actively promoted how they were working
remotely or different hours, enabling them to manage
other life priorities.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
When leaders demonstrate no career detriment to working
flexibly, uptake of these options increases and employee
engagement follows.
The role of company directors in all of this is to
recognise adoption of flexible work arrangements as
one positive indicator of a culture that is inclusive.
Requesting information about the uptake of flexible
work arrangements, whether flexible work is impacting
promotion and hiring decisions, and incentivising the
CEO and leadership team to role model flexible work
themselves, are all ways that directors can support
genuine workplace flexibility.
“The role of company
directors in all of this is
to recognise adoption of
flexible work arrangements
as one positive indicator of
a culture that is inclusive.”
Supply chain reform
While awareness-raising and individual leaders have had
some impact in driving gender equality, if transformational
change is to be realised, there will need to be further
pressure placed on businesses. Government intervention
through legislated quotas has been very effective in
countries like Norway, however at this stage there is no
political will for quotas in Australia. Another way to drive
behavioural change is through supply chain pressure.
Companies can actually encourage their suppliers to take
steps to make their workforces more gender diverse by
requiring them to respond to questions about diversity
and inclusion in their tender process. The simple act of
requiring suppliers to respond to questions about how
they are actively working to make their workforces more
diverse and inclusive forces a conversation in the supplier
company. Where choices are made based at least in part on
this information, change will start to occur.
Supply chain pressure has been effective in driving
improved workplace health and safety standards in the
garment and manufacturing industry and in reducing
the carbon emissions of numerous companies seeking to
meet client requirements. Many big businesses and both
the Federal and Queensland Governments have diversity
requirements in their procurement processes.
Directors of ASX companies should be asking about how
diversity and inclusion is being considered in procurement
processes, and requiring that steps be taken to preference
suppliers who are leading in this area. Not just because it
is the right thing to do, but more importantly because it
means that suppliers are more likely to be making better
business decisions and considering risks most effectively.
Conclusion
In my experience, about 95 per cent of organisations
that are seeking to improve diversity and inclusion have
some form of mentoring program or leadership training
for women. The ‘products’ of these programs are profiled
in company newsletters and annual reports. Of all the
organisations I have worked with over the last decade,
only the Swedish Military has a program focused on what
men might need to do differently in order for gender
equality to be realised. What this means is that we
consistently reinforce to our workforce that the problem
is with women, not with the structure and assumptions
they are working within. In 2016, perhaps it is time
we took a different approach, starting with leadership
accountability, addressing the myth of merit, creating
genuine flexibility and engaging our suppliers. Perhaps
it is time to shake things up a little and reallocate the
budgets we currently allocate to enhancing women’s
leadership skills to coaching leaders to be more mindful
of how to lead diverse and inclusive teams.
The evidence base is clear – more diverse and inclusive
businesses will be ones where all employees feel safe,
supported and authentic, thus enabling them to commit
themselves fully to their work. The fundamental question
of advancing gender diversity and inclusion is one of
leadership. Are we willing to tolerate incremental progress,
or are we ready to fundamentally rethink the current
system and ensure that women and men have equal access
to opportunity in our society?
companydirectors.com.au
Board navigation in the digital age
As changes in digital and technology rewrite business rules in
every sector, boards are navigating the best way to incorporate
these skillsets.
Boardroom visits to Silicon Valley have become so common in recent years
some commentators have unfairly dubbed them “director tourism”.
Louise McElvogue GAICD
Trustee,
Sydney Living Museums
Chair,
Faculty of Arts and Social Sciences
Advisory Board at UTS
Member,
Industry Advisory Board
at UTS Business School
Immersion in the Valley dynamic of technology companies, start-ups and
academia can be invaluable to fast-track digital and technology knowledge on
the board, galvanise strategic plans and underline the cultural change needed
to encourage innovation.
The real challenge, however, is maintaining that momentum in the boardroom
back home and ensuring ongoing engagement in the issues so that digital
becomes part of the board’s DNA.
Boards are increasingly looking for directors experienced in digital and
technology to help with this engagement and many ASX companies listed this
experience in their skills matrix for the first time last year.
While some boards are focused on recruiting directors with relevant
experience, others are establishing technology advisory boards to bolster that
connection with current expertise. Consumer-facing businesses, like retailers
and banks, are often doing both as well as adding technology and digital board
committees to address the issues.
Deciding the best approach depends on the context of your business challenges
and existing skills mix. Below are some issues to keep in mind for boards
looking to increase their exposure to digital and technology.
Less technical, more cultural
While Silicon Valley trips focus the board on the latest technology and digital
platforms, the takeaway for many directors is the fundamental cultural change
needed to encourage innovation.
This shift is as much about people as it is about technology. Success in the
digital realm requires a laser-like focus on customer-centricity and most
businesses require major cultural and organisational change to make this
happen.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
A director’s technical understanding per se, is less
important than their experience using technology to
transform businesses, applying a digital mindset to
strategic decisions and navigating change.
Having an experienced person in the boardroom asking
the right questions is a great catalyst for driving change
and bringing an outside view.
Dealing with opportunity and risk
The very term digital disruption frames these changes
as risks rather than opportunities. It is important for the
board to balance both opportunity and risk and adjust the
risk appetite appropriately.
There is plenty of risk that boards need to be across
including managing brand and reputation on social
media, the threat of cybercrime and technology failure.
It is important to ensure the board has visibility of these
threats, an understanding of their potential impact and
appropriate disaster recovery, crisis and contingency plans.
There is also much opportunity in digital and technology,
which may need a different approach from the board.
Rapid product development and innovation mean some
boards may need to get comfortable with a faster pace of
decision-making and a different understanding of risk in
non-core parts of the business.
Breadth and depth, finding the right director
Many Australian boards have added digital and
technology to their skills matrix in the past year,
but directors are not hired for these skills alone.
A good director brings broad business strategy and
operational perspective and is able to contribute to
the debate beyond digital.
A recent analysis of the ASX 300 found that each board
has an average of 2.6 board members from accounting and
finance and only 0.25 board members with a technology
background. Technology expertise is under strength across
listed companies accounting for just 4 per cent of the
available board roles, according to the Watermark Board
Diversity Index 20161.
1
2
3
Similarly, digital and technology experience do not feature
in the top directors skills of ASX companies, according to a
report for the ASX on Corporate Governance by KPMG.
Given the impact of technology on every sector, the
authors were surprised that more ASX companies,
particularly those in the top 200, did not identify
technology and digital experience as a top ten competency
for directors2.
Boards need to be clear about the digital and technology
skills they require, based on their strategic plan.
Understanding for example, if there is a greater emphasis
on innovation or transformation experience will help
define the appropriate director experience. This avoids the
temptation to use terms like “digital director” as a catch-all
for anything technical.
While some boards may need very specific technology
skills – such as the manufacturing or mining sectors
– many are looking for experience of technological
disruption in business models, operation and using digital
to reach consumers.
A good example is the skills outlined by AGL Energy
for new board appointees, which reflect the needs of
a consumer-focused company, facing competition and
changing customer behaviour.
These included “Experience from an industry that
has been materially disrupted or transformed by the
emergence of new technologies” and “Experience in
consumer markets with an understanding of customer
behaviours in an increasingly digital world”3.
Finally, a note on age. In the push for digital skills,
some businesses get fixated on finding a digital native,
technically someone born after 1980. This is an unhelpful
criterion that rules out many qualified candidates (Google
founders Sergey Brin and Larry Page, for example,
would not qualify). As with any director, the skills mix,
experience and compatibility with the board remain more
important factors.
http://watermarksearch.com.au/files/2016/04/Watermark-Board-Diversity-Index-2016.pdf
https://assets.kpmg.com/content/dam/kpmg/pdf/2016/05/asx-corporate-governance-council-principles-recommendations-jan-dec-2015.pdf
https://www.agl.com.au/~/media/AGL/About%20AGL/Documents/Media%20Center/ASX%20and%20Media%20Releases/2015/150826_
CorporateGov_1466519.pdf
companydirectors.com.au
Digital and technology are the responsibility
of the whole of the board
Technology is transforming the rules of business in every
sector and understanding its impact is the responsibility
of every board member. Just as each director needs to
understand the company’s accounts, they also need to
understand investment, risk and opportunity from digital
and technology
The head of the Audit and Risk Committee may need to
know what an API* is as much as the digital director needs
to understand what NPV* means.
* API stands for Application Programming Interface
and APIs are the common way technology companies
integrate with each other.
* NPV Net Present Value. The difference between the
present values of cash inflows with the present value
of cash outflows.
Boards increasingly understand that digital cannot be
the responsibility of one director. Each board member
needs to become digitally savvy and understand the
specific issues in the sector.
Ensuring Digital Currency
The dynamism of the landscape means that technical
experience is quickly outdated. The impact of smartphones
has so fundamentally changed business that technology
experience before the 2007 introduction of the iPhone is
not applicable according to some commentators.
While many businesses may have focused in recent years
on the growth of social media or the move from the web to
mobile and wearables; tomorrow’s big issues will include the
impact of artificial intelligence, virtual reality, technology like
Blockchain and other developments yet to be discovered.
Ensuring the board stays current with changing trends
is about mindset and the right support. The value of a
director with relevant experience lies in their ability to
translate the potential impacts of new developments.
Many boards are establishing dedicated board
subcommittees to keep on top of developments and
oversee large-scale transformation. Other boards rely
on the CEO or the strategy and technology executive,
establish advisory boards, bring in expert advisors and do
their own research to ensure currency.
Diversity breeds diversity
One of the positive yet unintended consequences of a
focus on increasing digital and technology diversity is
early evidence of more women on boards.
Women comprise a far greater share of digital directors
than non-digital directors in the world’s 300 largest
companies, according to a Russell Reynolds 2015 study.
“Women comprise a far
greater share of digital
directors than non-digital
directors in the world’s
300 largest companies.”
Almost a third of digital and technology directors were
women, compared with an 18 per cent average for women
at board level, across all disciplines. More research is
needed, though this figure does reinforce the findings that
women board members increase notably when boards use
a competency-based approach for recruiting directors.
The heightened focus on critical competencies like digital
expertise, leads naturally to more women candidates and
subsequent appointments.
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GENDER DIVERSITY QUARTERLY REPORT – VOLUME 4
For more information please contact
t: 1300 739 119 e: [email protected] w: companydirectors.com.au/boarddiversity
05385-2_16