Is there merit in quotas? The Australian context
Speech by Elizabeth Broderick
Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination
Australian Human Rights Commission
Second Diversity on Boards Conference
Sheraton on the Park
Elizabeth St, Sydney
2 September 2009
I want to begin by acknowledging that we are gathered on the traditional land of the Gadigal people of the Eora Nation. I pay my deepest respects to their elders past and present.
One of the great things about being in this position is that I have had the opportunity to work with many Aboriginal and Torres Strait Islander women. The courage, integrity and impact of their leadership has cemented my resolve to focus on the issue of women’s leadership during my term as Sex Discrimination Commissioner.
Indigenous women in this country are now leading the way when it comes to pushing radical solutions to guarantee they are equally represented in national Indigenous leadership. Last week, my colleague, Tom Calma, the Aboriginal and Torres Strait Islander Commissioner announced the proposed model for a new national representative body for Aboriginal and Torres Strait Islanders in Australia. Given the exceedingly low representation of indigenous people in Parliament, it is important to have a body to represent the voices of indigenous people in decisions that affect their lives. While there are many notable elements of the proposal, one stands out: mandated gender equality. The new Representative Body will be led by two by full-time co-chairs – one man and one woman and at every level there will be an equal number of men and women.
As Tom has said, this body would exhibit the highest standards of ethical conduct and will set a new benchmark for gender equality in national organisations, from which all Australians can learn.
So, after this historic leap for gender equality in Indigenous Australia, today’s Conference gives us an opportunity to work out how we will also take up the challenge in corporate Australia.
To be honest, I cannot think of a more fitting place to discuss this topic. I had the honour of speaking at the first national Diversity on Boards Conference last year. There is nothing quite like the buzz and vibrancy of women leaders – current and aspiring – and it’s a pleasure to be here with you all again today.
I particularly want to thank Women on Boards for holding this conference, for inviting Arni [Hole, Director General of the Norwegian Ministry of Children and Equality] to share her experiences and for yesterday’s Boardroom Readiness workshop. Given that the lack of informal networks is one of the often cited impediments to women’s leadership, opportunities like this are truly invaluable.
Arni, I want to thank you for sharing with us Norway’s experience of gender equality initiatives and introducing quotas into the corporate sector.
As you have highlighted, the Norwegian experience shows us that quotas can radically alter the outcome when it comes to women’s representation in corporate leadership.
Indeed, it’s a running joke in my office that we should just pack up shop and relocate to a Nordic country.
However, given that’s probably not an option for us, or for many others in the audience, today is a great opportunity to draw on these international lessons to work out what we need to do here.
And, let’s face it, we love a challenge!
So, the title of this morning’s session is ‘Is there merit in quotas.’ I suspect that the use of the term ‘merit’ was quite deliberate. For, it is the very concept of merit which has long been the sticking point when it comes to quotas in Australia.
So, today, I want to deal with that head on. Because I believe that the question we must reflect on is “do quotas undermine the concept of people being selected for positions on merit? Or do they actually work to uncover merit and thereby enable true merit selection in a patriarchal society?”
A quick survey of the state of women’s leadership in our country shows there can be absolutely no doubt that it is time for action and intervention if we are to guarantee progress towards gender equality in the marketplace here in Australia.
Fifty-eight percent of women in Australia work, compared with 80% in Norway. 1 Women constitute 45% of the total workforce in Australia2 yet they are under-represented in leadership positions in virtually all sectors of the paid workforce.
Let’s look at the public sector first? Women comprise 57.6% of Commonwealth Public Service employees and they outnumber men at all junior classifications. But women are under-represented at all higher classifications – they comprise only 37% of the Senior Executive Service.3 That is the high water mark - it’s all down hill from there.
What about Universities? Women account for approximately 50% of lecturing staff in Australian universities; however their numbers drop off significantly as the seniority rises. Women account for only 24.5% of Academic staff above senior lecturer. Up the road at the University of Sydney for example, only 14.5% of the professors are women and this is a similar figure across Australia.4 The majority of women in the tertiary education sector can be found in the non academic classifications.5
But it gets worse. It pains to me to say that the status of women’s leadership is perhaps most dismal in corporate Australia – and, even worse still, we are going backwards.
EOWA’s 2008 census of Australian Women’s Leadership in ASX200 companies revealed women hold only 8.3% of Board Directorships and chair only 2% of ASX200 companies (a total of four Boards). Women hold 2% of the Chief Executive Officer positions and 10.7% of Executive manager positions.
This most recent data represents a comprehensive decline since 2006.
The representation of women on boards in 2008 is lower than it was in 2006 and is almost back to 2004 levels.6
There are also signs that this downward trend is likely to continue and possibly worsen in the coming years as the already low number of women in feeder positions to top leadership appointments decreases. As many of you would know first hand, experience in line management positions is essential for progressing to top corporate positions. In 2006, women held only 7.5% of the Executive Line Management positions. By 2008, that number had fallen to 5.9%.
How can this be when women make up over 51% of our population and are educated to a higher level than men? In fact, the Global Gender Gap report released by the World Economic Forum last year shows Australia sits in the group of countries that are number one on women’s educational attainment but we are number 41 when it comes to women’s workforce participation.7
Let’s be clear - this isn’t just a problem – it is a national outrage. And there is no nation or government, industry or sector which can afford that kind of loss. Without significant intervention - by government, by business - the number of women progressing in the workplace may shrink even further.
There is no question that there have been some positive outcomes for women in Australia over the last 12 months. The introduction of a nationwide Paid Parental Leave scheme is just one example, clearly welcome and seriously overdue, given Norway had it in 1936.
But in terms of women’s leadership we are at a serious cross-roads in Australia. As a country that values the principle of a fair go for all, our record on gender equality should disturb us all.
Yet, what is exciting for me right now is that we have an historic opportunity to get this right.
In June this year, the Minister for the Status of Women, Tanya Plibersek, announced a review of the Equal Opportunity in the Workplace Act (EOWA) and Agency. The Act requires organisations with over 100 employees to promote equal opportunity in the workplace.
The review will enquire into the effectiveness of the Act and the Agency in increasing women’s employment opportunities and advancing women’s equality in the workplace.
Like many of you, in due course we will be putting forward a detailed submission to the EOWA review canvassing some new solutions. This review is intended to be solution oriented so I want to encourage everyone here to put your ideas forward.
In my view, now is the time for us to aim high and present a truly innovative plan. And, I want to make four points about what we should aim for.
Firstly, our plan can’t be confined to change amongst women. Nor can it just be about change between women and men.
I firmly believe that we will only see significant gains when men start working with men to solve this problem. The absence of women at the top of corporate Australia and all other sectors is just plain bad business. 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.
Secondly, we need to see the issue of women’s leadership in a broader context of gender equality.
I am well aware that the issue of women on corporate boards is not one which threatens basic human requirements like housing, food and safety. However, let us 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 stats on women’s leadership reflect our progress towards gender equality, as does our record on addressing violence on 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.”8
As the New York Times said recently, gender equality is the solution of our times.9
Thirdly, we need to be clear about where it is we want to get to. What are we working towards? As a mother of a boy and girl, I want to work towards a future where neither of my children’s choices or ambitions in regards to work and family will be dictated by their gender and a future where men and women are equally represented in all forums of leadership, influence and decision making.
And fourthly, once we have agreed what it is we want, then we need to put all the options and possibilities on the table so we can work out how to get it. As Arni said, it should be our ambitions which define the methods and tools, not the other way around. Without a significant change in approaches the only thing we can expect is more of the same.
So let’s start talking about new solutions – and let’s seriously innovate our plan.
As I have mentioned, and as many of you will know – the hostility towards quotas in Australia has been long held by both men and women. There is a pervasive view – at least in some circles - that quotas constitute favourable treatment for women and that this will undermine the principle of merit by either promoting women who are not up to the job or by under-cutting women in the workplace by creating the impression that they are not there on the basis of merit.
So, I think we need to talk openly about what the principle of merit means. It’s a very good principle. It aims to ensure that leadership selection processes are fair, impartial and transparent. It means the outcome isn’t based on where you went to university, or who you know, or what your parents do. The merit principle is intended to eliminate favouritism, nepotism and bias – and yes sexism.10 But unfortunately, it’s now being used to defend just that.
It’s time that we apply the merit principle to women. Quotas are one way of bringing women’s merit out into the open. When he amended the Sex Discrimination Act in 1995, the former Commonwealth Attorney General, Michael Lavarch anticipated the need for special measures. He was clear that these sorts of measures should be presented and understood as an expression of equality rather than an exception to it.11 By this he meant that there is a difference between formal equality and substantive equality: are we interested in equal chances or equal outcomes? Sometimes we have to treat people differently to get to true equality.
Last month the Corporations and Markets Advisory Committee released a report on Diversity on Boards of Directors which included an entire section entitled “The Problems with Quotas”. The Committee suggested that as the ultimate say on board composition in the private sector belongs to the shareholders, quotas would “cut across the powers of shareholders to choose the directors who will be accountable to them for the stewardship of their investments.”12
As the Norwegian model shows, the use of quotas does not take decisions out of the hands of shareholders. Shareholders’ decisions have never been completely unfettered. The introduction of quotas would only mean that if a female candidate was put forward by the Board who was unacceptable to shareholders, then an alternative female candidate would need to be found. As the women in this room and the 7000 women who are members of Women on Boards remind me, that shouldn’t be too hard!
Another familiar argument against quotas and other interventions is that they are an unwelcome government intrusion in the private sector. The threshold question here must be “should governments interfere in the business of corporations in the area of gender equality?” My answer to that is a resounding and unequivocal YES! It is clear that we cannot leave equality to the market. There are many areas where the market fails and government intervention is necessary to drive a different outcome.
What we’ve seen when it comes to women’s leadership in the corporate sphere is nothing less than market failure. Many companies are not utilising all the available talent and we require intervention by government, and by business to turn this situation around. Corporations law has been with us for some time, and we are now having a fresh debate about the role of regulation arising from the Global Financial Crisis.
Over time I have become convinced of the importance of identifying the intervention points and measuring the effectiveness of our responses. As someone with a background in business, I know this enthusiasm is shared by many other business leaders. Why is it that a sector usually so focussed on achievable, time bound and measurable outcomes is so reticent to apply these to issue of gender equality?
Leadership on gender equality in business and decision making already exists in Australia.
One measure which has been used to significant effect in the States and Territory public sector has been the adoption of voluntary targets. For example, both the ACT and South Australian governments have set themselves the target to achieve and maintain 50% representation of women on Government boards and committees. In South Australia they’ve gone so far as to set themselves deadlines and even if it doesn’t look like they are going to reach them, they are measuring their progress against them and publically reporting the outcomes. Both these jurisdictions vastly outperform the corporate sector. In the ACT in 2008, 48% of Government board members were women and 34.7% of Government boards were chaired by women.13 The numbers are similar in South Australia.14
There are some corporations which are taking their own initiatives to track and improve the representation of women in leadership positions. For example, Woolworths track and report publically on the numbers of women in leadership positions. They also conduct audits of gender pay gap and publish the results in the annual report. The numbers show that the pay for store staff is practically equal for both men and women. In executive roles, Woolworths has said the gap is narrow … and they “are looking to narrow it further.''15
Telstra is another example of a company that has set targets. These targets are monitored monthly and are included in the performance plans of their executive managers. They now have 31% women in the senior management team and of course, Catherine Livingstone as Chairman of the Board.16
There may also be other measures which will garner support in the coming months – for example, formalised pathways from government and not for profit boards to listed company boards, or changes to government procurement policy to reward companies with an equitable representation of women at senior levels?
There are many ideas and we need to hear them.
Undoubtedly, there will be resistance to these new solutions which challenge the status quo. We must expect that. But the more women and men we have on board, the greater will be the pace of change. Arni talked about the importance of making clever alliances. I hope that we can forge some more of those today. And remember, let’s not just talk amongst ourselves. Find the men who also know that we need this change, and urge them to start speaking up where it really will make a difference – at the top.
Let’s not lose this opportunity as we approach the review of the Equal Opportunity for Women in the Workplace Act, to think big – and with determination.
This review is a unique opportunity for us to send a strong message that talented women in our country are no longer prepared to wait politely – quietly – to be asked.
I would encourage all of you to make a contribution to this review, don’t assume others will express your views. I want you to recall the stats on the current state of women’s leadership in Australia I just summarised? All of us have a vested interest in changing that picture – for both women and men, and for our children.
Again, Arni I want to thank you for joining us at such a timely juncture. It is invaluable to have you present the Norwegian experience as we continue to explore the measures available to us.
Here in Australia, gender is back on the agenda – let’s forge our alliances, and bring our smartest thinking to bear on the challenge that lies ahead.
Kate Pickett and Richard Wilkinson recently published a book entitled The Spirit Level: Why more equal societies almost always do better. They remind us “there is a better society to be won: a more equal society in which people are less divided by status and hierarchy ... Nor is this a utopian dream: the evidence shows that even small decreases in inequality, already a reality in some rich market democracies, make a very important difference to the quality of life.”17
Join with me. Let’s get started.
 Australian Bureau of Statistics (ABS), 6202.0 - Labour Force, Australia, Table 03. Labour force status by Sex, July 2009. At www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Jul%202009?OpenDocument (viewed 24 August 2009)
 Level E and above. University of Sydney, Annual Report 2008. At www.usyd.edu.au/about/publications/annual_report/2008/hr_annual_report_2008.pdf (viewed 24 August 2009)
 Department Education, Employment and Workplace Relations, Staff 2008: Selected Higher Education Statistics, Table 2.7: Number of Full-time and Fractional Full-time Staff by State, Higher Education Provider, Function and Gender, 2008 . At www.dest.gov.au/NR/rdonlyres/7D7AC7D2-C71E-462B-A778-D4814776E729/25898/Numbers.xls (viewed 24 August 2009)
 In 2006, 8.7% of Board positions were held by women and in 2004 it was 8.2%. (EOWA Australian Census of Women’s Leadership,2008, p 5, At www.eowa.gov.au/Australian_Women_In_Leadership_Census/2008_Australian_Women_In_Leadership_Census.asp (viewed 24 August 2009))
 World Economic Forum, Global Gender Gap Report 2007, p 38
 Quoted in Ernst & Young News Release “The strength women bring to rebuilding the world economy,” 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)
 Kristof, N & WuDunn, S, “The Women’s Crusade,” The New York Times, August 17, 2009. At www.nytimes.com/2009/08/23/magazine/23Women-t.html?_r=2&pagewanted=all#, (viewed 24 August 2009)
 Burton, C, “Merit, gender and corporate governance,” in Women, Public Policy and the State, Hancock, L (Ed.), Macmillan Education Australia, South Yarra, 1999
 Corporations and Markets Advisory Committee, Diversity on Boards of Directors, 2009, p 49. At www.camac.gov.au/camac/camac.nsf/byHeadline/PDFFinal+Reports+2009/$file/Board_Diversity_B5.pdf (viewed 24 August 2009)
 ACT Office for Women, Department of Disability Housing and Community Services, Taking Stock, Reporting on the ACT Women’s Plan (2004-09) Indicators of Success, (2009). At www.dhcs.act.gov.au/__data/assets/pdf_file/0011/66818/Taking_Stock_WomensPlan_-_Indicators_of_Success.pdf (viewed 24 August 2009)
 Lucy Battersby, ‘Call for audits of gender salary rates’, The Age, 1 September, 2009. http://business.theage.com.au/business/call-for-audits-of-gender-salary-rates-20090831-f5b6.html
 Telstra, pers comm, 1 September 2009
 Kate Pickett and Richard Wilkinson, The Spirit Level: Why more equal societies almost always do better, Allen Lane, 2009, p 264