AFG Venture Group Dispatches

Corporate advisory and consultancy in Australia, South East Asia and India.

Women, men at odds over board shortfall

March 15th, 2012

by Narelle Hooper and Catherine Fox The Australian Financial Review www.afr.com
15 March 2012

Mind the gap – because it’s a big one. A survey of company directors shows men and women are at odds over the scant number of women on listed company boards.

Men blame it on lack of women in senior executive ranks, while women blame it on lack of access to male ­networks.

Harvard Business School professor Boris Groysberg and researcher Deborah Bell for search firm Heidrick and Struggles studied the experiences, attitudes and practices of directors selected from the ASX top 100 and New Zealand’s top 50.

They found that 60 per cent of male directors attributed the gender disparity to a lack of senior executive women (the pipeline).

But 70 per cent of female directors cited closed, male-oriented networks and lack of access to decision-makers (the network). Not one woman director identified a shortage of women executives as a barrier.

“Women are seeing it from one angle and men from another. But it’s about both the pipeline and networks,” said Heidrich & Struggles partner Judith MacCormick. “We’ve come from an industrial model of work and that model is ­antiquated.”

A director of National Australia Bank and ASX, Jillian Segal, said the survey underpins the need to focus on diversity in companies.

“It sort of proves the point,” she said, adding that recent research by Chief Executive Women and Bain uncovered a gap in gender attitudes.

“The finding that women and men have different perspectives on the cause and defining features is not surprising, because that is the very proof of what we are trying to achieve in encouraging more women onto boards.”

The preliminary results show that despite having better qualifications, women are relegated to director roles and being passed over as chairs.

Critically, given the rapid growth of emerging economies, directors believed their boards lacked relevant global expertise. About 40 per cent of the Australian and New Zealand directors, compared to 23 per cent in the United States, believe they lack international expertise.

Forty per cent, compared to 16 per cent in the US, also ­indicated their boards lacked ­industry knowledge.

Ms Segal said a diverse workforce created value, reflecting both business customers and communities.

“It takes good chairmanship to draw the best out of a diverse board, but diversity around the table doesn’t mean lack of cohesion. You can still have a board united on values and cultures and cohesive but coming at things a different way,” she said.

Dr MacCormick said boards could no longer afford to merely “pick someone they know” as directors – mostly former chief executives, ­lawyers, accountants or bankers. “If you keep on going for people who have been through the traditional route you are not going to have people who are questioning and have new ways of working.”

She said men were given opportunities to progress on their boards while “women were clearly way behind the eight ball”. The study included no women chairs, and only 10 per cent were lead directors, whereas 39 per cent of men were chairs and 18 per cent were lead directors.

“It’s been shown time and again you need more than one woman on the board. The saying goes ‘one is a token, two is a conspiracy and three makes a difference’.”

CEO of corporate advisory firm AFG Venture Group, Lindley Edwards, said rapid technological changes demanded boards with different perspectives.

“Technology is so disrupting the status quo of business, that you’d better be able to understand it. It’s building up a high performance team around the board table and not being afraid to disagree and to have a dialogue about what could disrupt our business model.”

The Australian Financial Review