Here’s another mountain for women to climb in the C-suite

There’s still wide discrepancy between female representation on boards and in the C-suite.

Making it all the way to CEO remains a challenge for women

Promising gains have been made for gender equity in Australian boardrooms amid the uncertainty of the Covid-19 pandemic, with the number of female directors on company boards continuing to grow.

However, a clear gap is emerging between board representation and executive leadership. As female representation on company boards continues to climb, the number of female chief executives has remained stagnant and alarmingly low for a half-decade.

Many boards are assessing the diversity of skills in their members as we come out of the pandemic, looking for new ways of thinking. Now is the time to make moves that achieve both gender equity and broader diversity objectives across all leadership roles.

Deloitte’s seventh Women in the Boardroom: A Global Perspective report, released this week, shows that last year all-male boards disappeared from the ASX 200, while the representation of women on ASX 200 boards was at an average of 33.7 per cent, compared with 29.6 per cent in 2019.

On the C-suite level the results are less heartening – and somewhat puzzling. Only 5.7 per cent of the more than 300 companies surveyed had a female chief executive. This figure remains unchanged from 2016 and is only slightly higher than the global average of 5 per cent. It also trails behind some of our Asia-Pacific neighbours, such as China and Thailand, where women respectively make up 6.4 per cent and 11.6 per cent of all chief executives.

Australia’s underperformance in this area comes even as the proportion of female chief financial officers – a historic feeder role for chief executive roles – jumped from 11.6 per cent to 16.3 per cent during the same five years.

The report also shows that, on average, Australian female company directors sit on more boards than their global counterparts, suggesting they have influence over the executive appointment process at more companies.

All this shows is that the discrepancy between female representation on boards and in the C-suite is a multifaceted problem that requires a holistic response.

One way to start would be by selecting more female executives for operational roles within the business to set up more female executives to be candidates for the chief executive role, while reviewing the selection processes to remove biases and open options for female candidates.

This should be supported by succession planning that includes gender-based objectives such as ensuring one female candidate for each C-suite position.

It also could be the right time to refresh how executive teams are looking at gender equity. “Targets with teeth” also should be set for executive teams; for example, gender inclusion metrics that are reflected in personal assessments and remuneration packages.

When corporate Australia prioritises inclusivity, it can achieve tremendous results in a short time. Outside the ASX 200, the report shows that women hold at least 29.6 per cent of the board seats at 303 surveyed Australian companies, with roughly one in 10 of these boards being chaired by a woman. In 2014 women held only 15.1 per cent of the surveyed board seats, just over one in 20 chair positions, showing that the proportion of female directors and chairs has almost doubled in just seven years. This represents the consequences of a significant amount of work and attitude change at the top of the corporate ladder in the past decade. It also represents a widespread commitment to increasing board diversity. Unlike some other countries, Australia has no mandatory gender quotas for public or private boards.

This result is more significant in a global context. Of the 51 nations surveyed in the report, the average number of board seats held by women is only 19.7 per cent

While there is still more progress to be made, Australia’s commitment to board gender diversity means it now ranks an equal 10th in female board member representation alongside Denmark and ahead of some countries that have some form of national quotas for female directors, such as Germany, Austria, and Greece.

As we enter a new year, boards need to challenge themselves and approach promoting women in the C-suite with the same enthusiasm they have shown in recruiting women to their own ranks. Such a shift will take time, requiring concerted efforts in many areas. There is no silver bullet. Developing a pipeline of female chief executives is a collective responsibility of the whole community that will require an ongoing and deliberate commitment by all Australian business leaders.

Clare Harding is Deloitte Australia’s Chief Strategy Officer and a board member of Chief Executive Women.