How to make sure you get the best female leaders

Another women’s day, another reckoning. It has become traditional on International Women’s Day to take stock of the role and place of women in society, and decry how it is still less than equal. This extends to the business realm, where women earn and lead less.

A study by research firm IBIS World, released yesterday, has illustrated the wage disparity.

It found women working full-time earn 79.6% of the average male weekly earnings, compared to 79.1% in 1996. It’s a persistent figure – it’s crept up 0.5% in the past 15 years. “For all the talk of equal pay in this country, there’s still a long way to go to bridge the gap,” IBISWorld general manager Karen Dobie says. “However, it’s an inequity that is not unique to Australia, with women in developed nations worldwide typically earning four-fifths of what their male colleagues take home.”

Part of the problem is that women are less likely to occupy high-paying roles in organisations. When it comes to females in leadership positions, IBIS World found 2,222 out of 14,294 senior positions in Australia’s top 2000 companies were held by women.

The figures point to a severe underutilisation of half of corporate Australia’s human resources. But it’s all well and good to say that. How can the problem be fixed?

Claire Braund, executive director of Women on Boards, is blunt.

“It’s not rocket science,” she says. “Just treat them better and be more flexible in [your] work practices.

“What if, just from your [board and executive] turnover, you appointed 30% women … It’s not hard – you can actually solve the problem.”

This ‘just do it’ approach has backers. For example, Gail Kelly, Westpac CEO, aims to have 40% of the bank’s senior management positions filled by women by 2014, and half by 2017.

There’s another reason to engage women: fail to do so, and they could become your competitors. A recent survey by the Australian Women Chamber of Commerce and Industry found that of nearly 3000 businesswomen who owned and operated their own business, 78% had left a job in middle- or upper-management. This suggests that many female executive prospects aren’t waiting around to be ushered through the glass ceiling.

“The biggest issue is women stepping off executive careers just before they hit that level where they’re ASX 100 board material,” says Braund.

“The reality is that women are the main caregivers. And companies are often not particularly flexible, even if they have policies that say they are.”

Part of the problem is like hiring like – directors tend to hire people who, like them, come from a very specific background. To hire more women, Braund says organisations have to rethink the skill set they demand from company leaders.

“You have to broaden your range of skill sets, for example, to marketing or HR,” she says.

Frances Feenstra of The 100% Project says unconscious bias in promotions holds women back.

“Leadership is generally equated with what men are good at – that’s deeply engrained in our overall culture, and by extension in our organisational culture,” she says.

“The main thing people come up against when trying to do something about this is the very entrenched cultural norms in their organisations. And they really do stop women getting into senior roles.”

To make workplaces more open to promoting women, Feenstra says a number of levers have to be pulled. While she says flexibility is important, its effects may be more complicated than first envisioned.

The 100% project did research on men’s working preferences, and the effect of this on women.

“We looked at was how important flexible working was for men. We had been told new generation of men would want it. But we found while men like to work in organisations that have flexible working policies, they won’t use them. They see it as a career-killer.”

This means those who utilise flexible work practices may still face a stigma, or be seen as not being committed to their work.

Feenstra says quotas may be one way to break through the cultural barriers and unconscious biases that stop women rising to the top, but stresses it is just one option.

Nareen Young, CEO of the Diversity Council of Australia, says flexibility needs to be considered a legitimate career choice.

She says a whole-of-company strategy must be in place.

“Employers need to understand that valuing diversity means the best people get hired and get heard,” Young says.

“Strategically managing diversity requires a long-term strategy, in terms of organisational preparation, affinity and diversity networks, assessing needs of minorities, doing audits and censuses, benchmarking, strategies for retention. And, of course, evaluating progress.”

Young says that while progress on the issue has stalled for most of the past 25 years, it has come to the fore of business leaders’ minds in recent years. Asked about quotas, she says: “Wait and see.”

“I do, however, wonder whether a diverse range of women are being represented on Australian corporate boards or is it that, put bluntly, Australian boards continue to fish for members from the same pool?” she says.

“We know the number of women on Australia’s corporate boards, but we don’t really know how diverse they are in other aspects. Australian boardrooms need to better reflect our diverse communities in their age, care-giving status, class, cultural identity, disability and sexuality, as well as gender.”