Where are the women?
Posted on 23 Dec 2013
A quick look at building better board equality on not-for-profit boards.
As we all know, women are underrepresented in Australian power centres.
While they are very slightly in the majority overall (Australia had 50.6% females compared to 49.44% males in the 2011 Census) they make up:
- Only 29% of federal parliamentarians;
- Only 5% of Abbott Government cabinet members;
- Only 30% of Australian award recipients;
- Only 16% of the directors of Australia's top 200 companies.
Things are getting better, slowly, in some areas.
The proportion of women on company boards has been increasing by 2% a year for the past four years, so we should reach equality by about the year 2229.
If you were an optimist you'd say that the rate for company boards has doubled in four years, and that if it kept going at that rate we'd reach equality by 2019; if you're a pessimist, you may look on this as a case of always jam tomorrow, never jam today.
Mind you, that 16% figure for women on boards is for commercial for-profits, not community-focused not-for-profits. Not-for-profits are doing better; much better. According to a 2012 ACOSS/Women on Boards/YWCA report, in the not-for-profit sector, 51.4% of board members are women - better than equal!
Mind you, in the not-for-profit sector, only 15% of workers are men, so a 48.6% board ratio actually means they're over-represented by 224%.
Even worse, if you counted just those not-for-profit groups that had 85% or fewer women on staff then women would still be a minority on boards. It's only those groups that have more than 95% of female staff that push the total figure over the midline to that 51.4%.
Another problem, in all sectors, is that even when women do get into the top tier they generally don't get the plum positions. In the private sector women have 16% of board memberships, but only 3% are chairs and only 3.5% become CEOs.
Women also get 35% of the lower-status Australian honours and only 20% of the more prestigious gongs.
Meanwhile, in the not-for-profit sector, women have 51% of board memberships but only 44% are chairs or presidents, just 31% are treasurers, while 35% are secretaries. Even community organisations are apparently reluctant to trust women with too much authority.
A further issue is that the proportion of women on not-for-profit boards goes down as you go up the scale. Not-for-profits that run on less than a million dollars have more women on the board than men; for organisations with a turnover of more than a million, there are more men than women.
What's at stake?
There's hard evidence that greater diversity is good for boards. In the private sector, the Reibey Institute report on ASX 500 - Women Leaders found that the companies with female directors delivered an average return on investment that was 10.7% higher than those without women.
The same applies in not-for-profits, presumably; the chance to get a different perspective is a clear gain.
So how can we fix this imbalance?
Well, we've said before that the problem with Australian awards can be fixed by having every one of our members nominate one woman for a gong. The more women who are nominated, the more will get an award.
In the commercial sector there may be a case for mandatory quotas. For not-for-profit groups, though, how do we go about lifting the number of women on boards, and in leadership positions on boards?
There's no shortage of qualified women, particularly in the not-for-profit sector.
One worrying article, mind you, suggests that women should be cautious about coming on to not-for-profit boards.
"You need to look after your brand," says Fusion Retail Brands chair Susan Oliver. "Look at who else sits on the board, and be careful not to accept too many. You don't want to be known as the not-for-profit board expert."
After we deal with male prejudice against women, we can move on to business people's contempt for the not-for-profit sector.
In general, though, you get more women on boards the same way you fill any other gaps; you have a specific procedure for identifying the kind of board you want to develop, and you work towards that.
What's at stake when you have a highly homogenous board?
Financial: A Reibey Institute report on ASX 500 - Women Leaders found that the companies with female directors delivered an average return on investment that was 10.7% higher than those without women.
Reputational: How does it look to outsiders when your board lacks diversity? Check out page two of this annual report for a stark demonstration.
Results: McKinsey's have found that companies with the highest share of women on executive committees outperformed those with all-male executive committees - in the order of 41% in return on equity, and 56% in operating results. The authors described the correlation as "striking".