CHIEF EXECUTIVE WOMEN
FEBRUARY 2009
The business
case for
women as
leaders
ONE WOMAN
Is NOT ENOUgH
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The business case for women as leaders
CHIEF EXECUTIVE WOMEN Feb 2009
Introduction
Talent will be critical in managing the current economic downturn. Currently, Australian companies are missing out on a significant and measurable competitive advantage.
Several recent overseas research studies show a strong positive correlation between a critical mass of women leaders and outstanding business performance. For example, a 2008 McKinsey & Company study shows that companies with the most gender diverse management teams have an average EBIT 48% higher than their industry norms. It’s not that women are inherently more talented than men or that they necessarily have skills men lack. Rather, it seems those companies which identify and promote female talent into leadership roles have cultures that enable them to recognise talent in any form and make good use of it.
And research also shows that one is not enough – women must be present in sufficient numbers at senior levels to drive cultural change and better business results.
As a nation we seem to be ignoring this potential advantage by failing to develop and promote women leaders. Progress in Australia has been slow. Although the situation has improved incrementally over the past decade, it is still an alarming picture in terms of wasted talent and missed business opportunity.
In 2008, for example, 45.5% companies in the ASX top 200 have no women on the executive team1. Women hold only 10.7% of executive leadership roles in the ASX 200 and only 5.9% of
operating positions2. Boards are no better. 51% companies in the ASX 200 in 2008 still have
no female directors3. On the current trajectory it will take over 150 years for women to hold
anywhere near the same number of positions at senior levels as men.
Chief Executive Women (CEW) believes every organisation that is serious about optimising its talent should significantly increase the participation of women at senior management levels and on boards, aiming for the critical mass which will positively impact on results. We urge them to commit to firm targets as a priority. For some, this would mean doubling the number of women directly reporting to the CEO; for others it would mean appointing women for the first time as executives or board directors. Critically, improving gender balance requires personal commitment from the CEO and Board. Without this, organisations may go through the motions - maybe even win awards - but real progress won’t happen.
This paper outlines the most recent data on women’s participation in senior roles, influential research on the business case for gender balance, and offers some of the pathways emerging from CEW’s own experience.
1. EOWA, EOWA Australian Census of Women in Leadership, 2008 2. EOWA, EOWA Australian Census of Women in Leadership, 2008 3. EOWA, EOWA Australian Census of Women in Leadership, 2008
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Women in leadership – the Australian picture
is worse than we think
It is common to hear the view that equality of opportunity for women is no longer an issue. But the facts tell a different story.
Between 1994 and 2008, a period of record economic growth for Australia, the percentage of women CEOs and direct reports in the ASX 200 increased from 8% to just 10.7%.4
The percentage on boards grew from 3.3% in 1994 to 8.3% in 2008, but less of that movement occurred in the last 5 years.5 Indeed, the percentage of companies with at least
one female director in 2008 (49%) was less than it was in 2004 (50.3%).6
The issue isn’t the level of workforce participation or education. Women make up around half of all workforce entrants. Moreover, they are graduating in equal or greater numbers to men in economics, commerce, business and law faculties. By the time they reach senior executive level, however, their proportion has fallen to 10.7%, while only 2% get to sit in the CEO’s chair.7
The Stupid Curve (a phrase coined by former Deloitte USA Chairman Mike Cook) demonstrates the extent of the wastage of talent in Australian companies. It shows that rather than drawing leadership from the total talent pool, our organisations select nearly 90% of their leaders from just 50% of the employee pool - the male 50%. While men and women enter the workforce in about equal numbers, men have a 9 times better chance of reaching executive level than women.
Fig 1: The “Stupid Curve”
s r o t c e r i D s O E C s e v i t u c e x E l a t o T e t a u d a r g w e N hires workforce 89.3 Men Women 53 % of Population
Wasted talent
10.7 100 80 60 40 20 0 91.7 98 2 8.3Source: The CEW CEO Kit edition 2, EOWA Australian Census of Women in Leadership 2008
4. McKinsey & Company, McKinsey & Company analysis, 1994; EOWA, EOWA Australian Census of Women in Leadership, 2008 5. McKinsey & Company, McKinsey & Company analysis, 1994; EOWA, EOWA Australian Census of Women in Leadership, 2008 6. EOWA, EOWA Australian Census of Women in Leadership, 2008
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Equality of opportunity for women is also lacking when it comes to remuneration. Despite equal pay legislation passed 50 years ago, female executives in the ASX top 200 still earn considerably less than their male counterparts.8 Analysis of remuneration in company annual reports shows
that overall median pay for leading women executives is only 58% of the median pay for men.9
The following table shows a pay gap persists in 9 out of 10 industries, and is greatest in financial services. In part this reflects the relative absence of women in the ‘feeder’ operating roles which tend to lead up to the CEO’s position, and their over-representation in areas such as Human Resources, Legal and Corporate Communications which are less well paid.
Fig 2: Remuneration comparison of specified Executives from ASX 200 Annual Reports
Median remuneration $A female % of male female male male companies industry sector name $ $ count $ count count
Telecommunications Services 1,829,840 105.4% 2 1,736,082 12 2 Consumer Staples 699,143 76.7% 7 912,076 74 11 Materials 670,973 98.5% 6 681,179 218 31 Financials 502,536 48.0% 21 1,046,171 268 44 Health Care 434,994 94.7% 6 459,138 85 11 Consumer Discretionary 391,722 75.7% 17 517,420 159 27 Energy 334,775 61.6% 5 543,198 82 14 Industrials 319,365 53.3% 6 599,560 181 21 Information Technology 295,709 51.8% 6 570,321 40 5 Utilities 250,520 75.8% 6 330,500 31 7
Source: Table 6, Gender income distribution of top earners in ASX 200 companies, 2006 EOWA Census of Women in Leadership
International comparison reinforces the fact that the pace of change in Australia has been very slow. For example, the 2008 EOWA Census of Women in Leadership compared the presence of women senior executives in Australia with peer countries Canada, South Africa, the UK and the USA. As Figure 3 shows, with women occupying 10.7% of the total senior executive positions in the top ASX 200 companies, Australia fell behind each of its peers. Compared with Australia (54.5%), a greater proportion of companies in South Africa (59.3%), the UK (60.0%), Canada (65.6%) and the United States (85.2%) had at least one female executive manager.10
8. EOWA, http://www.eowa.gov.au/About_Equal_Opportunity/Where_Are_We_Now/Milestones.asp 9. EOWA, Gender Income distribution of top earners in ASX200 companies, 2006
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Fig 3: International comparison of percentages of women Executive Managers
Australia 2008 ASX200 Canada 2006 FP500 South Africa 2008 JSE United Kingdom 2007 FTSE100 United States 2007 Fortune 500 6 2 4 8 10 12 14 16 18 20 22 24 26
10.7%
15.1%
25.3%
15.4%
12.2%
0 %Source: EOWA Australian Census of Women in Leadership 2008
From these statistics it is clear that a much higher percentage of men reach the top than women, and they are paid significantly more when they get there. Although we have seen incremental gains, the pace of change in Australia has been slow, and it is obvious that time alone will not ensure that organisations achieve the gender balance which will enable them to optimise talent in their workforces.
Why it matters: the business case for women
in leadership
Closing the gap between male and female employment has huge global economic implications. According to recent research by Goldman Sachs, improved gender balance would boost US GDP by as much as 9%, Eurozone GDP by 13% and Japanese GDP by 16%.11
In Australia, the ‘elephant in the room’ for many CEOs and board directors is whether it really matters from a business perspective that there are so few women in leadership positions.
There are three reasons we think it does matter.
Talent management is critical to performance
In these challenging economic times, talent management is a critical requirement for performance. In recent years the issue was largely seen in terms of talent scarcity. In Confronting the Talent Crunch 2008, Manpower Inc reported on its survey of 43,000 employers world-wide. Overall, 31% of respondents saw themselves facing a talent shortage and this was higher amongst Australian employers (52%).12 Polls of business leaders conducted by McKinsey & Company similarly pointed
to a growing concern, and also to a lack of leaders’ preparedness to meet the challenge.13
11. Goldman Sachs, Gender Inequality, Growth and Global Ageing, Global Economics Paper, 2007 12. Manpower Inc, Confronting the Talent Crunch, 2008
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The current global financial and economic crisis threatens to bring about a significant increase in unemployment, organisational volatility and reshaping of workforces. Whilst organisations may not face the same level of talent scarcity in the short-term, the retention and optimisation of talent remains a central concern. Recent Watson Wyatt surveys of companies managing this radical downturn show that retaining talent is seen as even more important in order to be able to manage effective restructuring and to take advantage when economies recover.14
Australia is facing an economic landscape which will test organisations’ capacity to optimise talent. We will continue to be affected by longer-term trends which are constraining the Australian labour market. For example, the ageing of our workforce, retirement of the ‘baby boomers’ and low fertility rates. New entrants to the labour force are projected to be significantly less in future years than in 2008. More immediately, Australia will also experience the workforce volatility and uncertainty brought about by global economic turbulence. Those employers which continue to be adept at attracting and retaining talent in this changing environment will have a business edge. Part of the challenge will be addressing the issue of gender and ensuring that women are a growing part of the leadership pool.
As an example, one large retailer realised through workforce analysis that unless it retained and promoted a higher percentage of women it would not have sufficient store managers to cover the planned growth. This insight led to a number of policy changes that have taken the return rate after maternity leave from 60% to over 90%. A number of store manager roles are now job-shared – an outcome that was unthinkable just a few years ago.
The link between gender balance and performance
The second reason for improving gender balance is that companies with a critical mass of women at the top achieve significantly better business results than those companies with few or no women. The strong correlation between more women and better performance has been demonstrated in
research studies from the USA, the UK and Europe.
Research undertaken by McKinsey & Company in the UK reveals companies with a higher proportion of women in their top management have better financial performance – 10% higher return on equity, 36% higher stock price growth and nearly double the EBIT growth compared to the industry average. Their ongoing research reinforces this trend.15 The validity of this research
is reflected in the example of two Finnish banks which created a new index option invested solely in companies headed by women. Aalandsbanken and Tapiola banks jointly launched ‘Top Women’ an option investing in a group of 15 multi-national companies ‘selected for their strong profitability and large number of women in high level positions’. No Australian companies featured in that list.16
14. Watson Wyatt Worldwide, Financial Services response to the turbulent economy, November 2008 15. McKinsey & Company, Room at the Top – Women and Success in UK Business, 2008;
McKinsey & Company, A Business Case for Women, McKinsey Quarterly, September 2008 16. Raw Story Media Inc, Finnish banks offer option invested in women-led firms only, January 2008,
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Fig 4: UK Companies with the most gender diverse management teams perform better
Economic performance of the companies with most gender-diverse management teams compared with their industry average
Companies with most gender-diverse management teams1
Industry average
1 89 companies, identified with the scoring system developed by Amazone Euro Fund 2 87 companies, data not available for two companies
3 73 companies, financial sector not included 4
5Of the 89 most gender-diverse companies, 44 have a market capitalization greater than 2 billion eurosNon weighted average of sectors’ performance is equal to 1.7 Source: Amazone Eurofund database; Amadeus; Research Insight; Datastream; Bloomberg; McKinsey
Average ROE2 2003-2005 11.4% 10.3% +1.1 pts Average EBIT3 2003-2005 11.1% 5.8% +5.3 pts 64% 47%
Stock price growth4 2005-2007 compared with Eurostoxx 600
sectorial indexes
x 1.45
Source: Room at the Top – Women and Success in UK Business, McKinsey & Company 2008
Similarly, in the USA where executives make up a large percentage of board directors, research group Catalyst found companies with the most women board directors significantly outperform those with the least, in terms of return on equity (53%), return on sales (42%) and return on invested capital (66%).17
The higher performance of companies with women in leadership positions also appears to be a trend which persists over time. Again in the USA, The Glass Ceiling Research Centre tracked 215 Fortune 500 companies between 1980 and 1998, and found the 25 companies with the best record for promoting women were 18%-69% more profitable than the median Fortune 500 companies in the industry.18
Organisations with better gender balance tend to have inclusive cultures that optimise the skills and contribution of all their employees. They are also able to benefit from important leadership attributes which, while common to both men and women, are frequently stronger in women’s approach to work. Tom Peters is amongst those commentators and researchers who see women bringing particular strengths in, for example, appreciating cultural diversity, giving priority to relationship building, collaboration, information sharing and readily accepting ambiguity.19
17. Catalyst, The Bottom Line: Corporate Performance and Women’s Representation on Boards, 2007 18. Roy D Adler, Women in Executive Suite Correlate to High Profit, 2001,
http://glassceiling.org/InTheNewsFolder/HBRArticlePage1.html
19. Tom Peters, Re-imagine! Business excellence in a disruptive age, Paperback edition, Dorling Kindersley Publishers Ltd, May 2006
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Better employee engagement
The third reason why more women leaders matter, is because it leads to better employee engagement - a recognised factor in organisational performance. Those companies which identify and promote female talent into leadership roles have cultures that enable them to recognise talent in any form and make good use of it.
This is illustrated by another research study conducted by McKinsey & Company in Europe which shows that companies with three or more women on the executive team rate significantly higher than those with no women on measures including work environment and values, vision, coordination and control and leadership.20 These are crucial indicators of culture, and are central
to the engagement of an organisation’s workforce.
Fig 5: European Study shows companies with 3 or more women perform better on key organisation dimensions
Work environment and values Direction Coordination and control Leadership 51 56 68 48 72 61 57 55 Externalorientation Motivation Innovation Capability Accountability 63 70 64 52 64 53 65 71 66 67 To what extent is your company effective
in each of the 9 organisational dimensions?
Percentage of employees with positive evaluation*
* Analysis conducted on a sample of 101 Worldwide companies, or 58,240 persons surveyed
Note : Given the sample size, a 1% difference is statistically significant Source: McKinsey
Companies with no women (n=45) Companies with 3 or more women (n=13)
+7 pts +6 pts +5 pts +4 pts +3 pts +3 pts +1 pt +1 pt +1 pt
Source: Women Matter- Gender diversity, a corporate performance driver, McKinsey & Company 2007
Towers Perrin’s Global Workforce (2007) study found companies with the highest percentage of ‘engaged’ employees saw a collective increase of 19% in their operating income, and 28% in their earnings per share year on year. By contrast, those companies with the lowest engagement scores showed year on year declines of 32% in operating income and 11% in earnings per share.21
The research highlights that, for business benefits to flow from greater diversity, the presence of
one woman is not enough. It is argued that there needs to be 20% female employees at each level and in each function for a culture to start to change. At 30% there is a noticeable difference and at 40% gender is no longer an issue. The percentage of women in senior roles needs to reach a tipping point before diversity benefits kick in.
20. McKinsey & Company, Women Matter- Gender diversity, a corporate performance driver, 2007 21. Towers Perrin, Global Workforce Study, 2007-2008
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Myth busting – getting to the heart of the matter
Our recent experience has confirmed there are still commonly expressed myths surrounding women in leadership which contribute to a lack of action.
Myth One: good Equal Opportunity Policies take any
gender bias out of the system
Many organisations have a suite of EEO policies and assume they are effective. However, policies are often not practiced. For example, despite a widespread acknowledgement that men and women deserve equal pay for equal work, companies conducting a pay audit using the CEW CEO Kit have been surprised to find significant inequality in pay. This can, in turn, work against women as higher pay may be seen as reflecting greater suitability for promotion. Some have also discovered it takes women significantly longer to be promoted than men in the same roles, even when they are judged equal or higher in performance. Good data can identify the real gaps. Secondly, policies can still reflect or disguise historical assumptions about job and career paths which often disadvantage women. Many organisations are wedded to straight-line career paths that do not allow for time out and do not recognise the skills that women gain in family and other roles. Stereotypes about what women will (or should) do prevent women being encouraged to take operating roles which might lead them to the top, or being offered challenging assignments e.g. international opportunities. In addition, the business culture of organisations can be unconsciously biased in favour of men, for example, particularly valuing the directive leadership styles associated with men, supporting networking and mentoring practices which are less accessible to women, or assuming both men and women can equally participate in meetings when the reality is that women’s greater role in the family precludes that. Australian women working full time still bear the brunt of household duties, spending an average of 21 hours per week on household tasks as opposed to 11 hours for men.22
Culture is a critical determinant of how well women flourish and policies can support a culture and work practices that inadvertently put barriers in women’s way or assist their inclusion.
Good EEO policies are essential but there is value in critically putting these and their impact to the test.
Myth Two: The best way to promote diversity is to treat all
people in the same way
There are still tensions in workplaces when employees perceive their organisations offering women ‘special treatment’ such as flexible hours, part-time work, mentoring programs, special training or meetings with senior leaders. In addition, they see the costs of adjustments to meet women’s needs as difficult to meet.
The reality is that optimising the attraction and retention of talent demands that organisations create a culture that sees business benefit in having people with different backgrounds, perspectives, styles and approaches to getting things done.
22. Australian Bureau of Statistics, 4153.0-How Australians use their time, February 2006, http://www.abs.gov.au/ausstats/ABS@.nsf/Latestproducts/4153.0Main%20Features22006? opendocument&tabname=Summary&prodno=4153.0&issue=2006&num=&view=
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This implies valuing and respecting difference and being able to address the distinct needs of groups and individuals that might arise from their gender, age, backgrounds, generational views etc. To treat them identically is to potentially exclude them from fully participating.
Research tells us that women respond to an inclusive culture and set great store by the values of an organisation. They are attracted to inclusive environments, are more engaged employees than men, and will be retained longer if the organisation can accommodate some of their particular needs eg flexible work practices.
Achieving an inclusive mindset is the toughest, but most important, change for Australian organisations seeking to respond to diversity in the workforce and in our society. With a mindset that aims ‘to do what it takes’ to attract and keep talented people, work practices that may be particularly difficult for women can all be successfully adjusted. Inevitably, there will be some costs. However, given that the cost of replacing an employee is typically 150-200% of the annual package, reducing the rate of turnover through improving culture is worth the effort.23
Myth Three: Family demands are the main factor behind
women giving up leadership aspirations
Women leave organisations for a complexity of reasons. When men leave they often say it’s for better pay. When women leave, they often say it’s for family reasons. Neither is usually the underlying truth. Culture is one critical factor that affects women’s retention.
Fig 6: Is culture the ‘root cause’ of our female attrition?
Timeline: Apparent trigger: Typical stated reason on exit: Root cause: Comments:
Early leavers Family leavers Senior leavers
Graduate hire Senior executive
Within 3 years of joining, female graduate hires become disillusioned seeing male peers getting ahead in money, responsibility and presence
Children between ages of 0 and 10 NED opportunity, or new business opportunity
Better opportunity elsewhere Family responsibilities Become a director on boards
Culture
– Do not feel valued
– Missing out on career opportunities; do not see career pathways
Culture
– Criticised for ‘lack of commitment’
– Not offered interesting roles with flexibility
because of responsibilities outside of work
Culture
– Get ‘sick’ of boys-club culture – Still not heard or valued despite seniority
Often join other organisations, hoping things will be different
Often start own business or consulting or work for small organisation where can control own hours. Few stay home!
60% of women who become NEDs do so in their 40s, compared with 10% of men
Source: The CEW CEO Kit edition 2, Figure 3.5, page 38
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There are three periods when women are at risk. ‘Early leavers’ are graduates who exit within their first three to five years when they see male peers moving ahead in level of responsibility and pay. These young women don’t see career pathways for themselves, and often don’t feel valued by the organisation.
‘Family leavers’ are those who leave because they assume they cannot manage a career and family in their current organisation. But most do continue to work. One organisation found that six months after citing family reasons for leaving, 70% of women were working full time for a competitor company, 20% were working part time for other firms and less than 10% were at home.24
Finally, ‘senior leavers’ are women who have made it to upper middle or senior management levels but don’t believe they will be given further career opportunities, work flexibility and/or get tired of feeling like ‘outsiders’. According to search firms, one day they ‘get sick of it’ and move on. Many of these talented females leave to become non-executive directors (NEDs) at a relatively young age. In 2007, female NED’s were on average 7 years younger than their male counterparts.25
The reality is that many women will want to take time out of their career for family reasons and research shows that the vast majority will try to find their way back to paid work.26 Isabel Metz’s
recent research on women in the financial services sector demonstrates the criticality of flexible work practices and an inclusive culture in encouraging women to remain with, or return to, their current organisations.27 Despite the availability of family friendly programs in their companies,
the women who participated in her research cited reluctance to offer flexible arrangements, unwelcoming or unsupportive management practices and a ‘blokey culture’ as hindering their continued employment.
Companies which want to attract and retain women will look seriously at the availability of maternity leave, flexible hours, part-time work etc and at how senior women can re-engage their careers. They should also be on the alert for factors in their culture and work practice that, over time, cause women to leave and cite family as a palatable reason for moving on.
24. Workforce Management, Competitive Advantage Optimas Award Profile: Deloitte & Touche LLP, 1996, www.workforce.com/archive/feature/22/17/66/index.php
25. Australian Council of Super Investors Inc, Board Composition and Non-Executive Director Pay in the Top 100 Companies: 2007, www.acsi.org.au
26. Sylvia Ann Hewlett, Off-Ramps and On-Ramp: Keeping Talented women on the road to success, Harvard Business School Press, 2007
27. Isabel Metz, Women leave to have babies: fact or fiction? Conference paper, 21st ANZAM Conference, 2007; Jen Bryce, Playgroup to Workgroup: the experiences of women returning to work, Akira Coaching, 2008.
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Making progress – experiences of CEW members
If having a critical mass of women leaders matters, why have so many Australian companies made so little progress? And why do so few have it as a key performance objective?
Over the last five years, CEW has gained considerable insight into why progress in promoting women leaders has been slow and what needs to happen to lift our game in Australia.
Through our Talent Development Program we have worked closely with CEOs and high potential women in 14 large organisations on career management and leadership skill building. This highlighted that most organisations have very little information about why they are losing their female talent.
In response we developed the CEW CEO Kit for Attracting and Retaining Female Talent which is a comprehensive framework to assist analysis and the development of strategy. It is based on both up-to-date research and current organisational experience. We believe strongly that:
Facts are critical –‘what gets measured gets done’;
Organisations need to engage with the business case for change, not just the ‘feel good’ aspects;
Change must be driven from the top; and
There is value in a staged approach to that change. It is a complex process that requires both longer-term strategic commitment and practical, flexible tactics.
At the heart of the CEW CEO Kit are 5 core questions under which are integrated 20 critical issues and 120 explorations and analyses. They are structured in ways that lead an organisation to gather data, analyse and act on those issues that are most relevant to its business.
The 5 core questions are:
1. Is identifying and promoting female talent a top priority for our CEO, leadership team and board?
2. Are we appointing our fair share of female talent? 3. Is organisational culture driving our female talent out? 4. Does our pay distribution by gender tell a story? 5. Are we managing our female talent for leadership roles?
The CEW CEO Kit and support consist of: a detailed handbook, the charting tool which enables sophisticated presentation of the organisation’s data, the opportunity for benchmarking across key indicators, introductory seminars and a user group. They are all aimed at enabling organisations to dispel myths by surfacing the factual realities and to start the journey by focusing on critical priority actions.
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Moving forward
CEW strongly believes Australian companies should commit to significantly increasing the female representation at senior levels and on boards over the next five years.
We would urge them to set challenging, achievable, evidence-based targets as a priority. It is not unrealistic for many companies to double the number of women reporting directly to the CEO over the next five years. In the UK the top 100 FTSE companies now have a ‘bulge’ of women just below CEO as the result of serious attention to the issue. Those boards without female directors should aim to make their first appointment a priority.
Each organisation is unique and will approach the issue of attracting, developing and retaining female talent differently. While it is not possible to prescribe the way forward, our recent work leads us to suggest some tangible actions that decision-makers might take.
A top-down priority
Like all company-wide objectives, achieving critical mass of women at every level has to be a CEO priority and tackled like any other serious business opportunity.
First steps
Build a business case for change after examining the statistics in your organisation and asking the 5 core questions of the CEW CEO Kit. Identify the benefits to your business of greater female representation at senior levels. Road show the plan among Board and senior leadership to ensure everyone understands the potential benefits for men as well as women.
Form a top-level task force to set priorities and develop and implement action plans. (This should include respected male leaders as well as women). Expect the change program to last 3-5 years. There is no ‘silver bullet’ – lots of small steps will be required. Specific initiatives however will yield results fairly quickly.
It took one retailer 3 years to move from there being 16% women in the top 500 to there being 19%, then just 1 year more to achieve 26%. A tipping point was reached.
One consumer goods company increased the number of women in the top 40 executives from 0 to 8 in three years once the CEO made it a business priority.
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Hiring and promotion
Organisations need to open their eyes to talent in all forms - checking the way they hire and promote people to identify and eliminate practices which have the unintended consequence of holding women back.
First steps
Target a minimum of one woman to be interviewed and ensure there is at least one woman on every selection committee.
Make a point of offering high potential women ‘career-making’ assignments, even if it is felt they might not accept or that it’s more risky than appointing a male colleague with similar qualifications; encourage women to take operating positions, especially early in their career.
Track graduate hires by their year of employment to ensure women as a group don’t fall behind male peers on factors such as time to promotion, variable and fixed pay, or moves into career-making operational roles.
Review interview and talent assessment practices to identify hidden stumbling blocks for women.
Education
Organisations will benefit from investing in educating both men and women in the new mindset of ‘do what it takes’ to attract and retain talent and in understanding and valuing gender differences.
First steps
Inject ‘gender awareness’ modules into all leadership training programs. Both men and women benefit by learning how to manage and respect style differences.
Create a women’s network where female employees can share experiences and tips for successfully navigating through male oriented organisations.
Ensure all high potential women and female graduates (as well as high potential male graduates) have an advocate within the organisation - someone who knows them and their work and who is eager to help them find challenging opportunities “to show their stuff”.
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Analysis of culture
Organisations need to audit their culture and work practices to identify factors which inhibit productivity and retention, not only of women but, increasingly, of older workers and Gen Y employees. It is likely changes in culture will be necessary to keep talent of the future - both women and men.
First steps
Assess whether you have a ‘face time’ culture requiring long hours and weekend work, and look at its impact on productivity. For example does the requirement that employees be on call 24/7 have a hidden cost to the company in terms of retention, increased stress and lost productivity? Are people who work hard for 8 hours then depart for the day less productive or committed than those who stay on for 12 hours or more? What is the cost of turnover caused by overly demanding or ‘last minute always’ work practices?
One organisation improved its retention of women by 50% by enforcing a ‘no meeting before 9am or after 5pm’ policy.
Insist that all executives, male and female, lead by example - take holidays, work from home occasionally and importantly come and go at reasonable hours.
Instead of praising people who worked long hours, one highly regarded leader asked, “What’s wrong? Are you struggling with the work? Is the deadline unreasonable?” This was a powerful signal that altered organisation behavior.
Change ‘straight line, ever upwards, time-based’ career path assumptions. Place a value on project experience, skills learned outside work, lateral moves and part-time work for example, managing a family builds skills that are valuable in the workplace, including time management, team work, and highly developed organisation skills.
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Measure and report results
It is important to establish metrics and track and report progress as you would with any business initiative.
First steps
Set program targets, milestones and KPIs and report to the Board/internally on an ongoing basis. Unless getting more women into leadership roles is a performance indicator for the CEO and leadership team, it will inevitably slip down the priority list.
Commission surveys by a third party and report results. These might be exit surveys conducted 3-6 months after the employee leaves as people often do not fully reveal their reasons through internal interviews. People are fearful of burning bridges and often haven’t yet had time to reflect on the real reasons for leaving.
Adjust engagement surveys to include questions related to challenges faced by women and always have results cut by gender. Some organisations interview new recruits when they join and follow this up 6-12 months later to get valuable insights into cultural barriers and positive attributes.
Conclusion
Achieving a critical mass of women leaders will be a tough but highly rewarding journey.
Australia has made incremental gains over the past decade but the picture for women in senior roles and on boards is still a serious concern. Research has shown the business case for change in terms of addressing talent scarcity, positively impacting on business results and fostering greater employee engagement. The presence of women in senior positions will become an increasingly recognised indicator of performance.
We hope that CEOs and boards will accept the challenge.
CEW will continue to encourage organisations to make better use of their female talent. It will support the ongoing analysis and benchmarking of gender balance and encourages organisations to use the CEW CEO Kit to come to grips with the realities of their practice, and to take strategic steps forward. This paper is the first of a series of reports which, we hope, will show more rapid progress in the attraction, development and retention of female talent.
Acknowledgements
This paper was developed by members of the CEW CEO Kit Committee – Jane Bridge (Chair), Diane Grady, Jillian Broadbent, Christine McLoughlin, Sandra McPhee and Belinda Rowe. Particular thanks to Diane Grady for her contribution to the writing of the paper, and to IAG who made available Carolyn McCann and Margaret Keneally to assist its initial development. Megha Sharma, Mary Valentine and Susan Tiffin provided valuable support for its production. This discussion paper was designed by Uno Advertising Pty Ltd. We would like to thank Barbara Willoughby-Thomas for her support in its production.
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About CEW and the CEO Kit
CEW is a by-invitation voluntary organisation of over 150 women leaders in Australia. Our purpose is to encourage and promote the effective use of female talent by Australian business, government and the community. CEW aims to make a difference by helping talented women attain important leadership roles in Australia and assisting organisations to improve their development and retention of women leaders.
The CEO Kit is a flexible set of resources developed to help organisations overcome the ‘fact gap’ and make real progress in attracting, developing and retaining female talent. It has been tested in 10 leading companies, all of which acknowledged valuable insight from the process, and has been distributed widely across private and government sectors. There is increasing national and international interest.
The resources include:
The CEO Kit
A Charting Tool to assist organisations in reproducing Kit graphics
An introductory seminar
Opportunity to participate in benchmarking
A User Group
Contacts
We are pleased to announce that Ernst & Young are now collaborating with CEW and will be the point of contact for all sales and support inquiries related to the CEO Kit. For more information please contact:
Jenelle McMaster (02) 8295 6617 Sydney Louise Rollan (03) 9288 8377 Melbourne Or visit: www.cew.org.au
