Board Gender Balance – a personal perspective

Here are some ideas I drafted for a debate on gender quotas. I would love to have your feedback:
I consider myself to be a professional company director. I am chairman of an ASX listed company, sit on another listed board, am on the board of a company that is planning an IPO, and also on two government sector boards.

A few years ago (more than I care to mention in public) I was an aspiring director; doing well at my job but not considered to be ‘board material’ by the few head hunters who condescended to talk to me about my career aspirations. Nobody at the time suggested that I needed a quota to help me get ahead; the prescription was education and experience.

Being keen I took my ‘medicine’, doing the company directors course in 1996 and passing the exam and assessment task upon completion. I also completed a graduate diploma in Applied Finance as that was another area of weakness – I’m numerate but not an accountant; boards need directors who can read a set of accounts and draw their own independent conclusions from them.

Then I got stuck in a bind – I needed experience to get a job as a director but nobody would give me a job as a director so I didn’t get the experience I needed to get the job. There are two ways out of this bind. You can find a group of people who have so much confidence in you that they will invite you onto a board even though you have no experience or you can find a group of people who need your skills so much that they will invite you onto a board even though you have no experience.

Some people choose the first option and become so good at their jobs that they gain confidence and eventually board seats. Others, like me, find not for profit boards to whom they can make a contribution and get their experience that way before working up to paid commercial boards. Either route will work and is likely to give a better class of director than a quota system.

According to statistics compiled by the Australian Institute of Company Directors, 11.7 per cent of ASX 200 directorships are now held by women, up from 8.3 per cent when we first introduced our programs and initiatives at the beginning of 2010. Fifty-nine women were appointed to ASX 200 boards in 2010, a substantial increase on the previous year (with only 10 women being appointed in 2009). Already this year, 21 women have been appointed to ASX 200 boards. This growth has been achieved without quotas by the use of education programs, heightened awareness and networking.

Contrast this to the Royal Australiasian College of Surgeons: their most recent statistics show that of the 5,421 surgeons active in Australia today (or, at least, at the end of 2010) only 458 were female. That equates to only 8.4%. I haven’t heard any clamour for quotas of female surgeons to counteract this low percentage of female representation at, arguably, the pinnacle of the medical profession. Have you?

Perhaps this is because, when you are lying on the operating theatre table, puffing desperately on proffered anaesthetic, the last thing you are thinking is “golly, I hope I get one of the female surgeons. Even if she isn’t qualified or experienced, I want to give a girl a go at gouging out my inner bits!”

So why, when we talk about boards, do we assume that it is okay to allow unqualified women to practise directorship. Isn’t directorship a profession? Do we really expect investors to want to risk their savings on unqualified and inexperienced directors’ judgements?

This, for me, is the crucial issue. Directorship is a professional enterprise. It is important that Directors are skilled and experienced. This is an issue for women; it is a fact that, in the commercial sector, most people are invited onto boards of companies of a similar size to the one where they work. For the large listed company sector, from which most commentators draw their statistics, the percentage of female CEOs and of female senior executives is very low.

This is a problem because former CEOs and senior executives are prized potential board members and our pipeline just isn’t flowing. It is no wonder that female directors aren’t gushing out of such a turgid and constricted.
In small business the trend is much better with a female representation that almost matches the gender split in our society.

Until we fix whatever is wrong with our large organisations that prevents women from rising through the ranks in the proportions in which they enter those ranks, we will never see an equitable balance of women on the boards because we won’t have an equitable supply of women in the places where boards look for new directors. At the moment we don’t quite know what is wrong.

Attention is being focused on hiring and promotion biases, on maternity leave, career disruption and ongoing education, and on flexible employment practices. That is a good place to start. Clearer, and more objective, qualifications for directors (and senior executive advancement) would also assist.
What do you think?
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Julie Garland-McLellan has been internationally acclaimed as a leading expert on board governance. See her website and LinkedIn profiles, and get her books Dilemmas, Dilemmas: Practical Case Studies for Company Directors and Presenting to Boards.