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Christine Milne: "Why I changed my mind about quotas for women on boards."

Is it time for a quota for women in the boardroom?

By CHRISTINE MILNE

I haven’t always believed in quotas for women on boards. In fact, I spent most of my life believing that if women had equal opportunities in education than the inequality of female representation in parliaments and business would be overcome. I’ve now changed my mind and I’m tired of waiting. Women are being shut out of Australia’s boardrooms, not because they can’t do the job but because of a culture of exclusion. It must change.

A quick glance around shows we have a female Governor-General, with an all female staff, and a female Prime Minister. We have female sports champions, millionaires, Vice-Chancellors of universities, lawyers, bus drivers, engineers and teachers. In the Australian Greens Party Room women out number the males six to four and in my office my senior staff are predominately women. Women in Australia participate in a broad spectrum of workplaces in a variety of ways and I applaud it.

Recently, I walked into a room of business people supposedly engaged in a progressive business agenda and it was wall-to-wall men, with only two female representatives. My immediate reaction was there is no way these are progressive business people because they haven’t recognised that they have a problem and therefore are unlikely to be forward thinkers or visionaries. That is the risk for Australia in a competitive global environment unless our boardrooms change. Women bring to the table important perspectives and profitability.

The business end of town and the boardrooms of Australia’s top companies continue to be a female free zone. The Australian Institute of Company Directors found that only 15.5% of directors on ASX200 company boards are women and a total of 49 of these 200 boards do not have any women at all.  This means that when you step into one out of four of Australia’s top boardrooms you will not see a woman sitting at the table.

The case for changing who sits around that table is persuasive.

A few days ago, a new index to track the number of women on publicly listed companies in the Gulf region was launched, brought about by the Vice President of the UAE and Ruler of Dubai, that it would become compulsory for every government company in the UAE to have a female board member.

Quotas are also in place in Norway, France, Belgium, Iceland, Italy, the Netherlands and Spain. Australian companies are lagging behind. In 2012, 12.3% of board directors in Australia were women, while in the United States it was 16%. At the head of the boardroom table, 3% of Australian board chairs were women, compared with 5.3% in South Africa (Australian Bureau of Statistics).

In a world where money talks, it should be noted that companies with more women in senior management and board positions are more profitable. A study in 2011 (by not for profit research organisation, Reibey Institute) found that ASX500 companies with female directors delivered a 6.7% higher return on equity, over just a three year period, than those companies without any women on their boards. If that’s not enough incentive for change then it certainly should brush aside any doubts about directors duties to maximise shareholder profits.

Back at home the pressure for change is also mounting. The current prevalence of “boys clubs” has negative flow on effects for our society. A lack of women in senior executive positions can lead to an increase and continuation of the pay gap between the genders. It also leads to a culture which turns a blind eye to sexual harassment in the workplace, lack of flexible working hours and disregard for paid parental leave.

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Ultimately, the “boys club” discourages women from entering, or returning to the workforce. It will also be good for men. The next generation of male managers is increasingly looking for child and family friendly workplaces and flexible hours consistent with a reasonable work-life balance, rather than Wednesday afternoon golf.

Companies which fail to change their culture will not be attractive to the best and brightest men and women into the future. By mandating that companies must have women in leadership roles this culture will begin to change and the full potential of women’s contribution to economic growth will be realised.

A growing number of prominent Australians also see the need for quotas to drive change in the boardroom. The Governor-General Quentin Bryce, Shadow Treasurer Joe Hockey and the Federal Sex Discrimination Commissioner Liz Broderick have all backed the need for quotas.

Yet, last month in the Senate I called on the Government to legislate to ensure ASX200 companies have a minimum of 40%female board directors within the next five years, and both old parties rejected it. Coalition Senator Michaela Cash said that putting quotas in place is “demeaning to women, and has the potential to hinder the aspirations of women and develop a second class of citizen.”

Senator Christine Milne

Does Senator Cash really believe that all the men on Australian boards are there on merit and that women should wait for the revolving door of ‘mates’ to stop revolving? We already have a second class of citizen in the boardrooms of Australian companies and something needs to be done to fix it.

The debate is a familiar one. Mandated quotas versus voluntary merit based appointments are well worn arguments about the most effective means to drive social change. Despite the majority of Australia’s listed companies now having a gender diversity policy in place or planning to implement one, voluntary measures are not driving change.

A study released last week by the Australian Council of Superannuation Investors shows that progress is slow. There are no ASX200 company boards that have a majority of women and the median company board is made up of six men and one woman. The Council admits its voluntary benchmark of at least two female directors on the boards of ASX200 companies by 2014 will simply not be met if the status quo is allowed to continue.

The cries from business that self regulation and voluntary codes are working certainly have a familiar ring in my ears but the time for well-intentioned, self-regulated targets for gender equity is up.

Three years ago the Australian Greens called for the Corporations Act to require publicly listed companies with an annual turnover in excess of $15 million to ensure that women hold 40% of board positions within five years or risk closure. The proposal is based on Norwegian legislation introduced in 2003.

By the end of a five-year deadline, 93% of public limited companies in Norway had met a requirement that women hold 40% of board positions.  The Greens will take this policy to election day again on 14 September 2013. I don’t want to wait any longer to walk into meeting with company boards and to see women’s faces around the table.

Christine Milne is an Australian Senator and leader of the parliamentary caucus of the Australian Greens. You can follow her on Twitter here

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