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Daniel Andrews, board quotas and the myth of ‘insufficient women’

It will take more than the quotas Victorian Premier Daniel Andrews has suggested to add diversity to Australian boards. Martin Reddy/AAP

Victorian Premier Daniel Andrews has set gender quotas for appointments to Victorian government boards, but his rationale may be counterproductive.

Andrews stated that, because of his policy:

“By the end of 2018, no director of an ASX company will be able to look me in the eye and tell me there aren’t enough women in our state who are qualified to join them at the table.”

Although this policy is no doubt well intentioned, Andrews’ comment reaffirms two unhelpful assumptions. Firstly, that the reason there are not more women on boards is a lack of qualified women. Secondly, that prior experience on an equivalent board is the only legitimate precursor to future board positions. These assumptions are both untrue and unhelpful.

The assertion that there are insufficient qualified women for board positions is an argument used worldwide to defend gross gender inequality which cannot be justified any other way. However, in the UK, considering that 200 female board appointments would change the landscape of UK board gender diversity, researchers identified 2551 women with sufficient executive level experience, debunking the common excuse that there are insufficient qualified women.

Not for a lack of talent

Australian research suggests female directors are held to a higher standard; of directors appointed to ASX200 boards, 80% of male directors but only 57% of female directors had no prior experience on an ASX200 board. Not only are there a great number of qualified women who could benefit the boards of ASX200 companies, but the number required to bring about equality in new appointments (which is the issue Andrews seeks to address) is small.

There have been only 24 new appointments to ASX200 boards so far in 2015 and only seven of these appointments were female. Just five qualified women would be required to bring parity. In 2014 an additional 53 women would have brought parity to new ASX200 appointments. The issue is not the availability of appropriate females but the will to appoint them. Pretending the fault lies with women is illogical to the point of offence.

Changing the path to directorship

There is no shortage of women with experience relevant to ASX200 boards, but there is an even greater pool of women who could benefit boards with their alternative fields of experience. Prior service on an equivalent board must no longer be the only legitimate qualification for “a seat at the table”.

A board of diverse talents and experience is far more equipped to address complex problems and avoid “group think”.

Despite this, board recruitment often relies on narrow requirements. Decisions about the necessary skills for a board director remain largely unquestioned and experience is overused as a surrogate for job skills. Although the statement “past performance is not a reliable indicator of future returns” is oft repeated, it is rarely applied to board recruitment decisions.

Quotas successful internationally

Implementing quotas on government owned boards is a popular and effective means of promoting gender diversity on boards. Many countries have taken this step, including Austria, Brazil, Canada, Denmark, Israel, Kenya, Slovenia and Switzerland. Indeed, Israel and Norway have had gender quotas for the boards of government owned companies for decades.

Also, policy regarding government boards does not have to address the social contract vs free market argument regarding governmental intervention in private company affairs. In supporting the use of quotas Premier Andrews has notable supporters such as former Federal Sex Discrimination Commissioner Liz Broderick, former Governor-General Quentin Bryce, Treasurer Joe Hockey and Greens Senator Christine Milne.

Nevertheless, despite the attempt at positive action by the Premier, his comments may serve to reinforce the very mechanisms serving to lock women out of certain positions of power. Defining accessibility by existing access and measuring capability solely by past performance are antiquated approaches firmly embedded as means of excluding outsiders. We cannot expect to see sufficient change in any arena, including gender diversity on corporate boards, if we permit the repeated application of failed norms.

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