CEW’s Fagg says proactive companies seeking female leaders

New figures showing just how few women drive big commercial decisions in top 200 companies raise uncomfortable questions.

Chief Executive Women president Kathryn Fagg says there is a big change in attitude. Picture: Hollie Adams

Let me say upfront that Chief Executive Women is a very cool organisation, by far the most influential of the many organisations pushing the female barrow in business.

There is a dynamism to those involved, people like Diane Smith-Gander, NewsLifeMedia’s Nicole Sheffield and UBS’s Caroline Gurney — as with, dare I say it, a few Male Champions of Change. And there are couple of times a year when you get to a function where you can actually sense the networking grunt in the room. The CEW annual dinner, coming up again shortly, is one of those.

CEW president Kathryn Fagg has managed to keep a pretty low profile, considering she sits on the Reserve Bank board and is a director of Boral, and considering her diverse career across both the public and private sectors, in senior jobs at businesses like Linfox and BlueScope — let’s face it, pretty male-dominated workplaces. Last month, the University of NSW named her Australia’s top female engineer.

This week, though, she was out in front of the media armed with a piece of new and telling research from CEW. It reveals just how few women there are driving big commercial decisions in top 200 companies. Now this is really significant. Why? Of course it goes to corporate management, but it also feeds directly into the credibility of women on boards, yes that old chestnut. “We need women with line management experience!” has been the cry for some time. The truth is that it’s hard to find these women.

A dirty secret that jumps out in the CEW census, although well known in business circles, is that women in senior executive positions are usually there running human resources, or communications, or perhaps they are the legal counsel —
so-called “functional” roles rather than line management roles that create actual wealth and grow the business. Not to discount them at all, and Fagg is keen to push for more women in these roles. But when it comes to real wealth-creating types, only 5 per cent of CEOs are women in the ASX 200. And in line management roles, they still only make up a paltry 13 to 15 per cent.

It can’t have been an easy decision to commission this research. Dig a little more and the same data raises an uncomfortable question, especially for those who are themselves female chief executives. First, of the top 16 ASX 200 companies with more than 40 per cent women in the executive leadership (functional and line roles), only two of them, Estia and the Viva Energy REIT, have female chief executives. And the REIT, scoring 50 per cent, has a female CEO and one other on the executive. It is really only Estia where Norah Barlow has put in a good mix of women.

I put it to Fagg that it appears the sisterhood is not doing it for themselves. While the CEW President accepts there’s a way to go, she insists progress is being made. “It’s really terrific that we are seeing at least women being in CEO roles, which has obviously been very challenging. Most of the women I know in CEO roles are very committed to having more diversity in their organisations, including at the executive level. Those organisations that have women on boards are also very committed, but do we need to focus a lot of attention on the make-up of our executive team? Yes we do, and we particularly need to get the women in the pipeline for those lines roles and the CFO roles.”

There’s more. From the CEW census, 9 per cent of top 200 companies have a female chief financial officer. However, not one of the companies with a female CEO has a female chief financial officer, or a female chief operating officer or, as far as I can see, a clear female heir apparent. It turns out that the CEO’s that do best putting women in senior executive roles where it counts commercially are men, not women. That’s right. Take the Male Champions of Change, like Qantas’s Alan Joyce with Olivia Wirth, Jayne Hrdlicka and Leslie Grant all in very powerful positions while the big four banks, under their respective male CEOs, all score pretty well in direct female reports.

Qantas group executive Jayne Hrdlicka. Picture: Richard Gosling

So here’s the politically incorrect thought. Is the reason that there do not seem to be any C-suite female seconds to the female chief executives because these female CEOs feel threatened? Fagg says no.

“The female CEOs that I know neither feel threatened but I also can say that they are really committed to getting more women and are really helpful in what we’re doing in terms of being role models, in terms of being actively engaged in mentoring women, sponsoring women and the like. But, yes, we need to have more women in those senior roles.”

As to the inconvenient truth of there being very few female line managers under female CEOs, Fagg argues there is more pressure today on women in senior leadership roles that they are seen to be supporting other women. “The mission of CEW is women leaders enabling women leaders, so I can tell you very strongly that women in leadership roles are generally seen as really supporting other women. The challenge we’ve got though is to make sure we’ve got the women in the pipeline so that there is the opportunity to pull people in. The big change that’s also happening, though, is that companies are being much more proactive about going out and saying, ‘where are the really talented women?’ And in particular getting them on shortlists, because if the women get on shortlists, guess what? They will get selected.”

Last year CEW invited the extraordinary Singapore Telecom chief Chua Sock Koong to speak at the annual dinner. I remember being struck by her message of lean in, lean out or lean sideways, whatever works for you but that to go far, women aiming for the C-suite should be looking to climb up through smaller companies, getting more experience faster. What great advice. As some of those present noted rather girlishly, she was as terrific as her sapphires.

Ticky Fullerton hosts Ticky on Sky News Business at 6pm on weekdays