A perspective on the unequal representation of women in leadership

by Seyfarth Shaw LLP
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It is an indisputable fact that women are not equally represented in leadership roles or management positions in Australian companies and governments, not even close. Even in 2016, this is the case in almost all arenas of business and politics and is most certainly a global issue, although Australia even appears to lag in this indicator among developed nations. This flows through to an under-representation of women on boards of directors of Australian public companies. Earlier this year consultant Conrad Liveris found that there were fewer women in CEO and chair roles in ASX 200 companies than there were men named either John, Peter or David in such roles. What an alarming statistic! In this note we consider whether this under-representation is caused by a failure to recognise that women as much as men are able to achieve and sustain appropriate business outcomes and conclude that this is a matter that good corporate governance can resolve.

Given the ample research which highlights the effectiveness of women leaders and the financial and other benefits derived by companies with female representation at the management or board level, businesses should be investing resources in rectifying the issue. But first the widespread debate as to why the imbalance exists must be settled. Without a proper understanding of the drivers of the current state, solutions can surely not be appropriately devised.

Historically many have argued that women simply do not possess the qualities such a tenacity, determination and temperament, required to operate in these senior roles, or that they have different priorities in life to men, none more frequently quoted than “caring for their children”. But is this the real reason why we see so few women rise to the top? Or is there another explanation?

Have you ever considered that unconscious biases are keeping women out of the leadership roles to which they aspire? Do managers, men and women, have preconceived ideas about women that mean they unconsciously favour men for senior roles?

At a breakfast event hosted by the American Chamber of Commerce for International Women’s Day, presenter Susan Colantuono (CEO of US firm Leading Women) asked the men in the audience what percentage of women they believed left their corporate roles because of family responsibilities. Responses of 50% and 60% were confidently called from the audience. However, research conducted by Citi Global tells us how wrong these responses were. It found that 63% of women who resigned from their corporate roles took other corporate roles, the same percentage as men, while 22% of women started their own business. Only a portion of the remaining 15% of women who resigned their roles did so to care for their family. This is just one example of unconscious bias.

In her own US research, Susan considered what she believed were the three elements of leadership, being:

  1. using the greatness in the individual
  2. to achieve and sustain extraordinary outcomes
  3. by engaging the greatness in others,

and looked at how men and women were perceived against these elements.

When interviewed, managers ranked women above men in element 3 and equal with men in element 1. Interestingly, in relation to element 2, managers viewed men as significantly out-ranking women, that is, they viewed women as not having the financial, strategic and business acumen required to succeed in senior leadership roles. This sounds intuitively incorrect given women graduate from tertiary institutions and enter the workforce in numbers equal to or greater than men in most industries. In the last 10 years women in corporate Australia have consistently been given advice to “be assertive”, “promote yourself”, “get a mentor” and “try to think and act like a man” but this advice does not appear to have changed the situation to any significant degree.

What happens between women joining the workforce and the appointment of managers and leaders? How do women demonstrate to decision makers, and how do decision makers ensure that they are properly taking into account, the women’s financial, strategic and business acumen and so their ability to achieve and sustain extraordinary business outcomes? We consider the answer lies in self-awareness on the part of management candidates and decision makers, awareness of biases, unintentional preferences and pre-conceived notions. But it seems to us that with self-confidence (and sometimes arrogance and even hubris) induced by promotion, higher levels of self-awareness are lost or not utilised sufficiently by some leaders. This is a matter of corporate governance that is the responsibility of directors. Not only does this make business sense generally from a governance perspective but it is expressed in the ASX Corporate Governance Principles and Recommendations including in the requirement for a diversity policy. The suggestions for the content of such a policy produced by the ASX Corporate Governance Council include the identification and implementation of programs that will assist in the development of a broader and more diverse pool of skilled and experienced employees and that, over time, will prepare them for senior management and board positions.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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