Elizabeth BroderickDelivering Diversity

Speech by Elizabeth Broderick
Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination

Women in Banking and Finance, Westin Ballroom, Sydney

Monday 22 November 2010

Thanks to Melissa Marzuli, President of Women in Banking and Finance and the members of WIBF for inviting me to speak to you today on the topic of “Delivering Diversity” within the Financial Services Industry.

Membership organisations such as WIBF play an important role in the industry, supporting and encouraging women to build careers within Australia and of course globally. The rapid growth in WIBF’s membership, since its formation in 2000, demonstrates firstly, the need for an organization focusing on women in banking and finance and secondly, the impact WIBF has within the industry. The programs that Melissa has outlined will be vital to solving the under-representation of women, particularly at senior levels.

So it is a pleasure to be here today, to lend my voice and to support the work that you do.

I want to acknowledge today’s panel members – strong advocates of GE – Ms Jillian Segal, a non executive director of both National Australia Bank and ASX boards and Ralph Norris, Managing Director and Chief Executive Officer of the Commonwealth Bank of Australia.

We meet today on the traditional lands of the Gadigal people of the Eora nation. I pay my respects to their elders, both past and present.

I also acknowledge the emergence of a group of incredibly talented Aboriginal women in the corporate sector. A number of them join us today.

There are three things that I will talk about today:

  1. I will examine the data both in Australia and internationally about the gender mix on boards and at senior executive levels, particularly within corporate Australia and the financial services industry.

  2. Talk a little about the more recent initiatives to progress women’s under-representation and what is happening in the financial services sector; and

  3. Lastly, provide some brief observations about what needs to be done to help change the current picture of leadership with in the financial services industry.

Over the past three years, I have strongly advocated that the under-representation of women on boards and at senior management levels is an issue that needs to be addressed, immediately and at the highest levels. The fact is that most people agree. But being convinced of the benefits of gender equality in the workplace and actually delivering on this conviction are two entirely different matters.

Let me outline what the problem is. I apologise if the facts I present today are things you already know, but they are important so that we have a shared understanding of the problem.

I wish to issue a disclaimer right up front. Today I will be talking about women in paid work. In so doing, I do not in any way diminish the valuable caring work and other unpaid work that people and in particular women do. For myself, my role as a mother, wife and my role in the extended family is the most important work I do every day. The comments I make today are directed at supporting both women and men in work and care – it’s about supporting individual choice. These are the facts:

  • Australia is leading the world on women’s educational attainment (educating our women better and longer than most other countries), in fact the majority of university graduates are female.[1]

  • Number 1 on education but we are number 44 on women’s workforce participation.[2]

  • So women start with the same level of educational achievement (if not better), the same level of intelligence and commitment as men. But they are missing in action at the senior levels. And that is in every sector.

  • The EOWA 2010 Women in Leadership Census, released just last month which highlights the trends over time, shows there has been almost no movement in the last two years.

  • The percentage of Board Directorships held by women is 8.4% - that is up from 8.2% in 2002, 8 years ago! If you look below the ASX 200 companies the level drops to around 4%.[3]

  • Since 2004, there has been a steady increase in the number of ASX200 companies who have no women Board Directors at all. In 2010 we reached a new high of 54% of ASX200 companies with NO women Board Directors. That is a national disgrace.[4]

  • This is supported by the Governance Metrics International’s March 2010 report which showed that Australia has dropped behind all our OECD counterparts on the number of women on corporate boards with the exception of Japan.[5]

  • In terms of senior management, women hold 3.0% of Chief Executive Officer Positions (6 CEOs). This is an increase of 1.0% since 2008.[6]

  • And women still only represent 4.1% of executive line roles – a level that remains unchanged since 2008.[7]

  • The financial services sector is doing a little better than most. Across the ASX500 almost 10% of board positions are held by women.[8]

  • And this slide shows the correlation between the number of women on boards and superior financial performance over both 3 and 5 year periods. The research is clear, while there may be no causal link there is a strong correlation.[9]

These indicators clearly demonstrate that there is still an urgent need for systemic change.

The message you should take away is that we have a huge wastage of female talent in Australia. There is no nation or government, industry or sector which can afford this kind of loss. Without significant intervention - by government, by business - the number of women progressing in the workplace may shrink even further. Solving the puzzle requires all of us to take action.

Is there any good news? What is being done?

Well it is not all doom and gloom. As many of you will be aware the exciting news is that over the last 6 months we have seen significant momentum. This is in large part due to the changes to the ASX Corporate Governance Principles for publicly listed companies. They take effect from 1 January 2011.

Jillian Segal, who is a director of the ASX will speak about the changes in more detail in the panel discussion.

There have already been a number of organisations who have come out as early adopters of this reform – in the banking and finance sector organisations like Commonwealth Bank and Westpac Banking Corporation and I thank them for acting swiftly in launching and implementing gender diversity targets within their organisations.

The Australian Institute of Company Directors tracks, on a real-time basis, all new appointments to boards of ASX200 companies. Their data shows the number of women appointed to ASX200 boards in 2010 has substantially increased compared to last year. There has been a 5 fold increase. As at 19 November 2010, 49 women had been appointed to Boards, compared to 10 women during the whole year of 2009.[10]

There have also been some positive actions taken on this issue in the public sector. In 2010 the Labor Party announced:

  • A target of 40 per cent women, 40 per cent men on government boards and committees.

  • Scholarships for at least 70 women to undertake Australian Institute of Company Directors courses ;

  • New Women in Sport Register – boost women’s representation on sporting club boards, and report to government[11]

The ASX initiatives will also have an impact on the banking and financial services sector. This is a mature and sophisticated sector where the majority of jobs involve knowledge work. Australia has ambitions to become a strong regional financial services hub. The possible merger of the Australian and Singapore exchanges is just one example of our regional aspirations. I will be particularly interested in Jillian Segal’s comments on how any proposed merger might affect the ASX commitment to increasing women’s representation on boards.

But to be a strong regional financial services hub will require Australia, amongst other things to have a deep pool of talented financial services workers. Putting 50% of that talent pool to one side largely on the basis of gender does not make good economic or business sense.

Part of an effective strategy to address this issue is to develop high calibre, benchmark data.

I am sure many of the organisations represented at the lunch today are doing just that, collecting and analysing the data within their own organisations. But it’s also important that this is done on a sector by sector basis.

I am pleased to learn today that WIBF has committed to commissioning research that will provide benchmark data for the sector. This research will provide a strong base against which to measure progress across the sector. This research will also be the first of its kind locally to focus solely on the banking and financial services industry and to include both publicly listed and unlisted companies.

Let me conclude by making a few remarks about the things I’ve learnt over the last 3 years.

Firstly, solving the under-representation of women at decision making level in Australia will have a broader impact than we might imagine. This issue is often framed as an educated, wealthy white woman’s discussion. As a result I am often asked why, as a human rights commissioner, I care about it. Let’s be clear. There is a strong connection between how women are treated in corporate and business life and how women are treated everywhere across our country and internationally. The statistics on women’s leadership reflect our progress towards gender equality, just like our record on addressing violence against women, sexual harassment, the gender pay gap and gap in retirement savings.

As Irene Lang, President of Catalyst recently said – “Until women are equitably represented in leadership in the private, economic sector, they will be marginalised in every other arena.”[12]

Secondly, we should stop trying to “fix” women. Up until now much of the focus has been on “fixing women” – on providing more assertiveness training, mentoring, networking and self branding advice. All important, but not sufficient. Instead of ‘fixing’ women, we need to realign or “fix” the system so that it works for everyone. We need to agree on what gender equality in the workplace looks like and then put all the options and possibilities on the table so we can work out how to get it. It should be our ambitions which define the methods and tools, not the other way around. Without a significant change in approach the only thing we can expect is more of the same.

In saying this I am not suggesting that business lose its focus on the bottom line or shareholder return. What I am saying is that a focus on changing the system to address this issue will deliver improved performance for business. The evidence in that regard is clear.

Thirdly, the importance of engaging men.

I firmly believe that we will only see significant gains when men start working with men to solve this problem. After all it is men who dominate nearly every institution in this country, particularly in corporate Australia. If there is to be change, male CEOs and business leaders have to champion it.

Having come to this epiphany after 18mths, yes I am a slow learner, I established a male champions of change group – influential and powerful men who could take the message of equality out to other men. These men have agreed to use their individual and collective influence to keep this issue on the nation’s agenda and to drive change within their own organisations. Members of the group include Ralph Norris, here today and CEOS of Citibank (sponsor of the lunch), Telstra, Deloittes, ASX, Goldman Sachs, Rio Tinto, Qantas, Woolworths, IBM and several others.

Glen Boreham, the CEO of IBM recently brought together 10 male CEOs of IT companies to discuss the issue of gender equality and women’s under-representation. They decided to press for more women on the AIIA Board, the peak national body representing ICT companies. The target was to double the number of women on the board with one year but within 6 months they have reached that target with the appointments of Tracey Fellowes, MD of Microsoft and Jackie Korhonen, MD of Infosys joining the existing 2 female board directors. Hardly a decrease in the quality of board members, you’ll agree. The Board now has 36% female representation and they are aiming for more.

Another less successful example occurred in the mining industry. This innovative CEO wanted to run job adverts with a statement at the bottom that all women applying for positions in areas where women were under-represented would be guaranteed an interview. I thought this was an excellent idea, a special measure under the SDA. So he took out half page ads in many of the dailies expecting a wonderful result. But when I saw him recently he said it hadn’t turned out quite as he expected. Not only did he receive a barrage of abusive phone calls from men telling him that it was clear he didn’t care about them and therefore they would not be applying, but the women in his team said they felt humiliated and belittled and wanted him to abandon the strategy immediately.

The law of unexpected consequences.

Having said that I do believe male sponsorship is important for women. As the beneficiary of a number of male sponsors across my career I am a great believer in it.

Fourthly, we should aim to achieve critical mass quickly. The reason I say this is that critical mass will create the change rather than change creating critical mass. As Jan Elsner said “We need to build critical mass in the presence of existing barriers. Critical mass will create the change we are seeking.” That is why targets and quotas must be part of any discussion.

When we achieve a critical mass of women in senior roles, diverse viewpoints and appreciation of difference will occur. Decisions affecting women’s promotion and retention will change. Fundamental decisions affecting risk and control in organisations will shift.

In the corporate sphere, this means a minimum of 40% of each gender on company boards within 5 years.

And finally, there are many different stakeholders driving change. Certainly we won’t agree on everything but each stakeholder is vital to creating the more gender equal world we desire.

For example as the SDC my role is to be an agent of change - to put on the table all potential options and solutions including targets and quotas. I need to keep this issue on the national agenda and to encourage Government to take an active interest.

But the role of the male champions is quite different. Their role is to pursue gender equality in their own organisations, particularly at senior executive level and to speak out publicly.

The role of the AICD is to grow the pool of available directors through their mentoring program, to publish the real time data and to represent its members’ interests by speaking with authority on this issue.

The ASX will ensure that companies are complying with the “if not, why not” corporate governance reporting requirements.

EOWA will be collecting and analysing trend data and to ensure that companies comply with their obligations under the EOWA Act.

Meanwhile women on boards, WIBF, CEW and others will continue to advocate for change.

My point is that no single person or organisation can create the change we need. It is through collaboration and action in our own spheres of influence that we will create a fairer and more equal Australia – that we will create the different future we all desire.

Mother Teresa said - "There are no great things, only small things done with great love." I challenge you, when you leave this lunch to do at least one small thing to change the picture of leadership in Australia. It may be as small as having a conversation with a male work colleague about why the issue matters.

If you’re a manager, it might be about ensuring that there is at least one female candidate on the list for any vacant position.

If you’re a buyer of services it might be enquiring about the level of gender equality of your suppliers – Julian – you and the Chaser boys might require some help on this front.

And if you’re a Chairman of a board with no female directors it might be about ensuring that the next appointment is a talented and capable woman.

As Galileo should have said “many small stars create a universe”.

Thank you.

[1] World Economic Forum, The Global Gender Gap Report 2010, (2010)
[2] World Economic Forum, The Global Gender Gap Report 2010, (2010)
[3] EOWA Australian Census of Women in Leadership (2010), at http://www.eowa.gov.au/Australian_Women_In_Leadership_Census/2010_Australian_Women_In_Leadership_Census.asp
[4] EOWA Australian Census of Women in Leadership (2010), at http://www.eowa.gov.au/Australian_Women_In_Leadership_Census/2010_Australian_Women_In_Leadership_Census.asp
[5] GovernanceMetrics International, Women on Boards: A Statistical Review by Country, Supersector and Sector, (March 2010)
[6] EOWA Australian Census of Women in Leadership (2010), at http://www.eowa.gov.au/Australian_Women_In_Leadership_Census/2010_Australian_Women_In_Leadership_Census.asp
[7] EOWA Australian Census of Women in Leadership (2010), at http://www.eowa.gov.au/Australian_Women_In_Leadership_Census/2010_Australian_Women_In_Leadership_Census.asp
[8] Reibey Institute, ASX500 Women Leaders Preliminary Research Note, (August 2010)
[9] Reibey Institute, ASX500 Women Leaders Preliminary Research Note, (August 2010)
[10] Australian Institute of Company Directors, Gender Diversity on Boards – statistics, at http://www.companydirectors.com.au/About+Directorship/Board+role/Board+Diversity/Gender+diversity+on+boards+–+statistics.htm?LM
[11] T Plibersek, Equality for Women, Australian Labour Party Policy Statement 2010, (2010
[12]Quoted in Ernst & Young News Release, ‘The strength women bring to rebuilding the world economy,’ News Release, (28 January 2009) at www.ey.com/CH/en/Newsroom/News-releases/20090128-The-strength-women-bring-to-rebuilding-the-world-economy (viewed 24 August 2009).