Wasting Talent: Organisations need to "rethink recruitment and selection"
A new report finds companies need to focus on moving women into senior management roles to prepare them for serving as directors on corporate boards.
BUSINESS will continue to be slowed down by a chronic waste of female talent if equal opportunity issues are not actively managed, a report for the Equal Opportunity of Women in the Workplace agency has said.
The lack of women gaining experience in senior management roles is holding back growth in the number of women serving on boards, the report says, and "a relative drought" of skilled and experienced directors is challenging the longer-term sustainability of business leadership.
The report, by consultants Egon Zehnder International, says organisations need to rethink recruitment and selection, and analyse the gender make-up of their organisation at all levels and how they measure and reward success.
Nineteen of Australia's "most experienced (female) public company directors" and 16 men who were current or previous company chairs were interviewed for the report.
Most of the women agreed that companies were "simply not doing enough to help women into their senior executive ranks" and most of the men believed that "attention to the management pipeline" would eventually effect the appointment of more women to boards.
The report drew on other research to outline six personal qualities every director needed:
The report suggests that a break from the workforce need not have a 'severe' impact on women's careers, and notes that many businesses are finding ways to minimise the impact of such a break.
"Businesses should also ensure their policies and culture support men who take time out to raise children," the report says.
"This will allow women and men to more equitably share caring responsibilities, which may mean shorter periods out of the workplace for women, lessening the damage to women's careers and reducing the stigma attached to career breaks."
Another point of optimism is the observation that about 50% of commerce and law students are now women, whereas a number of years ago they were in the minority, so "the opportunity to more fully exploit the management pipeline seems to be ripe."
Report author Chris Thomas notes that the repeated assumption that women board directors are "inherently less experienced" reveals a failure to acknowledge different experience and the need for diversity of experience.
"In relation to return on equity, return on sales and return on invested capital, those companies with more women board directors outperform those companies with the least women board directors."
The report says that having gender diversity on boards is important to help avoid 'group think', where boards became either too focused on monitoring management or too focused on supporting and encouraging management, neglecting the other role.
"A diversity of personalities reflecting a considerable mix of experience and roles in earlier corporate or professional life will ensure that healthy debate results within the boardroom and that critical questions are asked of other directors as well as of senior managers.
"Governance structures and processes that simultaneously promote diversity and shared understandings are vital for learning and self-correction."
This article first appeared in Business Community Intelligence, Febraury 2009