Diversity...and now for the backlash
Amanda Wilson, CEO
5 May 2016
By any measure the campaign to ensure more females are represented on ASX200 boards has gained momentum. With initiatives such as the Australian chapter of the 30% Club, launched last year, Male Champions of Change, AICD scholarships, gender diversity has never been more in vogue. It is now de rigeur for white middle aged (or nudging late middle age) male success stories to hold forth on the need for women to be more confident, back themselves, network with movers and shakers, submit to mentorship by those movers and shakers, study STEM subjects and become more robust negotiators.
Prominent women of course have long been boldly advocating on the topic of gender diversity. Former Sex Discrimination Commissioner, Liz Broderick, the indefatigable former head of the WGEA, Helen Conway and the superhuman Helena Morrissey, CEO of Newton Investment Management and 30% Club founder in the UK, have made significant contributions. Even Heather McGregor aka Mrs Moneypenny has visited our shores and shared her wisdom (manage your image carefully – hair and makeup must be done; start shooting birds for fun, because all the corporate leaders who matter do that, and one makes strong bonds in a hunting lodge etc). Louise Davidson, CEO of ACSI, has announced that organisation will consider recommending voting against directors on boards where there is no clear diversity plan.
As long term advocates on initiatives we see as critical for sustainable value creation in equity markets, we’ve been involved with large scale advocacy efforts and noted, with somewhat jaded eyes, that as soon as momentum builds – it is inevitably followed by a backlash. And so we expect it with gender diversity.
We have been raising diversity as a business issue in our meetings with chairs and other non-executive directors of ASX200 companies since our inception fifteen years ago. Our hypothesis was never a particularly sexy one. Nor was it confined to gender diversity. We simply advanced the somewhat modest proposal:
- Boards and their companies will benefit from genuine diversity of thought;
- The full spectrum of diversity of thought may well reside in one narrow demographic (white, middle or late middle aged male, who probably went to private school and studied law or accounting) but it is unlikely to do so;
- In order to ensure cognitive and experiential diversity, boards may need to throw their search nets wider;
- If they do that, with the aim of ensuring diversity of thought, diversity of appearance/demographic in board make-up would usually be a byproduct;
- In order to attract genuine diversity of thought, the corporate landscape itself must bend (i.e. different people, at different stages of life, have different needs of their workplace). Training women (for example) to be facsimiles of men clearly does not meet the diversity of thought objective.
Since that time we have contended with pipeline theory, unconscious bias, the threat of quotas, the ‘business case’ for more women, the inherent ‘difference’ between the brains of men and women etc. We have heard chairmen – some of whom are now Male Champions of Change – tell us that women cannot be equally represented at the upper echelons of corporate Australia because they have babies. We have listened, with some sympathy, to railing against pseudo-scientific evidence purporting to prove that more women at the top means better financial performance (one ASX50 chair even sent me an article by Schumpeter in The Economist which systematically dismantled that particular argument). Female purchasing power has been promoted – and derided – as a reason for women to be appointed to boards.
We’ve also been privy to many personal stories about the challenges of being a man in this environment. Several talented, experienced and thoughtful men have told us that, on applying for directorships, search firms have told them “we’d love to put you up, but you’re the wrong gender”. Others have asked, quite plaintively “does it really serve the diversity agenda to have an already over-committed woman (who, by the way, thinks like a bloke anyway) get even more board seats?”. (Note: 40 per cent of the 89 directors appointed to S&P/ASX100 boards last year were women but half of the new appointments already sit on another top 100 board). One or two have noted that they have always been the breadwinner, a division of labour enthusiastically endorsed by their (educated) wives, who have now been out of the workforce for twenty years or so – but still have a greater chance of getting on a board than them. Several professional women – many of them who have elected to remain childless in pursuit of their careers - have also confided that they don’t want to see women parachuting into positions without having done the hard yards.
We’ve also had numerous quiet chats with asset managers, an overwhelmingly male-dominated industry (at the pointy end), who acknowledge that they ought to get their own houses in order before they start pointing fingers at the corporates.
Many of these obstacles to diversity and objections to the way in which the diversity agenda is being prosecuted deserve attention themselves – because within them lie the seeds for the aforementioned backlash. If the process undermines the logic of merit, that backlash will be more severe. In fact, headhunter comments on “needing to wear a skirt” may well be indicative of that backlash already beginning: being told you are the wrong gender (which has happened to many women of course) is likely to provoke a strong, negative reaction. Being required to present one view, while privately holding the opposite (as many in the investment industry have confided), is a recipe for bitterness, providing fertile ground for sabotage.
Genuinely entrenching more diversity requires proper consideration and adjustment of the corporate landscape and addressing the not-so-hidden doubts held by powerful brokers in the system. That goes beyond insisting on hard numbers, and acknowledging both hard and soft systemic influences that run counter to diversity aims – such as antiquated child care arrangements, attitudes to workplace flexibility, especially for men , entrenched/narrow ideals of styles of leadership (impacting both men and women who don’t conform with the norm) and rigid job parameters and definitions of performance (e.g. privileging Darwinian competition over collaboration). Failure to do so risks corroding faith in the real aims of diversity: the development of inclusive work practices leading to sustainable value creation and one that creates greater choice and breadth of opportunities for both men and women.
Unless the focus broadens to more wholesale workplace changes and attitudes a focus on numbers and making ‘safe appointments’ is simply playing dangerously at the edges without going into the heart of the issue enough to avoid a backlash. Encouraging diversity of thought as the starting point may be instrumental to avoiding this.
 Across the S&P/ASX200, of the 175 people holding multiple non-executive roles in the 2014 sample:120 held two board seats, of which 86 were male (9.2% of all male directors) and 34 were female (19.2% of all female directors). http://www.afr.com/leadership/the-girls-club-is-the-new-directors-club-20151029-gklqoj#ixzz46QJO8WZl
 From Bain ‘The Power of Flexibility’ report: Approximately 60% of men surveyed are, have or want to work flexibly; men who work flexibly give their organisation a lower Net Promoter Score than those who don’t (4 vs. 26). The reverse trend is true for female employees. Men who are not satisfied with their flexible working experiences cite as key issues a lack of senior support and the negative view of working flexibly held by their peers and management. Men are also twice as likely as women to have their request to work flexibly rejected. http://www.bain.com/publications/articles/the-power-of-flexibility.aspx