My lightbulb moment occurred when I was chief executive of Lion Nathan. McKinsey had just published a seminal article on the war for talent comparing the good companies and the underperformers and I realised that focusing on 50 per cent of the gene pool meant missing out on 50 per cent of the talent.
It’s 2015, not 1950, but the numbers on gender diversity remain appalling.
Just 19 per cent of directors on the boards of ASX 200 companies are female.1 Men also dominate in management ranks – just 17 per cent of CEOs are women and only 32 per cent of senior managers are women.2 The percentage of women in senior management in the top 200 ASX-listed companies has not exceeded 13 per cent for the past decade3 and 62 per cent of these companies have no female senior executives at all.4 That means 124 of the nation’s 200 biggest public companies have no women in their senior ranks.
Women also earn significantly less than men, even though they may be performing the same work. The average male full-time worker earns 19 per cent more than the average full-time female worker.5 The picture is worse when you look at management ranks – according to the Workplace Gender Equality Agency, with the gap rising to 29 per cent the higher you go.
Equality of opportunity is first and foremost a moral and ethical issue. But the business case is also compelling - the return on equity for companies with significant gender equality is 10 per cent higher, earnings before interest and tax is 48 per cent higher and the stock price multiple is 1.7 times.6 The simple message is: a diverse and engaged workforce create value.
What can we do?
The Male Champions of Change project acknowledges that a system set up and run by men is not conducive to women having the same opportunities as men, to having women better represented in senior roles and closing the gender pay gap. We’ve all heard the stereotypes – “women lack ambition”, “women self-select out of the workforce when they become mothers”, “women who work from home are not productive”. Men need to embrace and push for cultural change if we are going to shift the dial.
While there is a lot of talk about flexibility, we need to stop thinking about it in terms of special treatment. Rather, companies should see it as an opportunity to differentiate themselves from others in a competitive jobs market. Flexibility is part of the employee value proposition and can attract talent to an organisation. We also need to counter the notion that working from home or working outside of the traditional 9-5 day is less productive – let’s start measuring in terms of output and outcomes, not hours in the office, because in my opinion, staff with so-called flexibility “privileges” can be more productive than a traditional 9-5 worker because they are trying to balance multiple commitments at work and at home.
Finally, we need firm diversity targets, not quotas, and boards and management need to be made accountable. One of the greatest things Westpac’s former CEO, Gail Kelly, did was to take diversity as one of her KPIs alongside the traditional indicators of performance. Her targets trickled down to her direct reports and their direct reports and so the picture began to change.
At Origin, the board has set three voluntary diversity targets and we report publicly on our performance every 12 months:
- Equal average pay for women and men
- Appoint more women into senior roles
- Improve our retention of women in senior roles