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Business is ignoring the case for gender equality at the top

They say a poor tradie blames their tools. For more than twenty years we have been trying to close the gender pay gap and establish a strong female talent pipeline. As it turns out, we’ve been using the wrong tools.

Illustration: Eric Lobbecke

Illustration: Eric Lobbecke

The gender pay gap, at 17.4%, is effectively no closer to being closed than it was twenty years ago, and it starts right at the beginning - a female graduate, on average, still earns $2000 less than a male graduate on entering the workforce. And, of course, the number of women in leadership and management positions remains depressingly low.

Women continue to be disadvantaged. As Anne Summers aptly summarised recently, ‘Women in Australia today work less, earn less and retire with less than men.’

We’ve been busy changing attitudes but attitudinal change takes time. While we wait for the pay gap to close, the next generation of women are falling headlong into it.

While there is a broad acceptance of the business case for gender equality, and I believe most Australians accept the argument emotionally, there has been no business urgency to make change.

To fast-track change, we need to treat gender equality like we would any other business initiative. We need to set targets.

This week KPMG released a report on ASX-listed companies’ responses to the ASX Corporate Governance Council’s welcome recommendations relating to gender diversity. Despite the plethora of research that shows equality in workplaces means better organisational performance, greater access to talent and competitive advantage, only 36% of the companies had set measurable objectives for achieving gender diversity and, in some cases, these were not expressed as numerical targets.

The only way we can effectively drive change is through a disciplined business-oriented approach that aligns gender equality with business strategy and treats it as a business priority (rather than an HR policy for the shelf downstairs).

This means setting targets for women in leadership and management positions and putting in place the infrastructure to achieve those targets.

We know that this business-oriented approach works because organisations that have followed it have seen change.

The Commonwealth Bank’s award-winning diversity program has seen women’s representation in executive roles increase from 21 percent in 2005 to 29 percent in 2011, and the percentage of women on the board also increase from 20 percent to 27 percent. A notable achievement in an industry that is traditionally bottom-heavy in women.

In a strategic business initiative driven by the CEO, Telstra has seen a significant increase in women’s representation in middle management and an ongoing reduction in their gender pay gap.

A successful, business-oriented approach to gender diversity will have three important components.

• The approach must be visibly endorsed and driven by organisational leadership.

• Rigorous, appropriate targets must be set without sacrificing the merit principle.

• The approach must be underpinned by accountability, transparent reporting against targets and tying the achievement of targets to executive remuneration.

There’s a difference, of course, between targets and quotas. Targets mean voluntary action, quotas regulation. Targets are the carrot, quotas are the stick. Unless businesses are willing to nibble at that carrot, I have no doubt that in the future, with little extra progress made, someone will come along and hit them with the stick.

Just last week Mirvac Group Director, John Mulcahy, called for quotas to drive the necessary change. Not usually an advocate of regulation, Mr Mulcahy was very much arguing from a business perspective. With only 16.1% of managers and 1.9% of CEOs in the construction industry being women, it is the rational business need to access a broader talent pool that is behind this call.

Since 2002, the Equal Opportunity for Women in the Workplace Agency has conducted a biennial survey of women in leadership positions in ASX listed companies. The results of the 2012 census will be released in November and, without any evidence that organisations have committed to a strategic, business-lead approach to gender equality, I’m not expecting any great leap forward.

We could spend the next twenty years campaigning for attitudinal change, but why wait when we have the tools available to initiate rapid change? Under the impending Workplace Gender Equality Act, employers will report to the Agency against standardised measures.

The data collected from this reporting will provide the information the Agency needs to set industry-based benchmarks.  The benchmarks can be used by organisations to set pertinent and measurable targets and build their own business case. A solid business-oriented strategy for gender equality is what it will take to create momentum, increase traction and drive ongoing change.

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