Based on newly released data, it won’t be long before diversity divas demand that the criteria for picking company chief executives be broadened to allow for more heads of human resources and in-house general counsel in the top job. If you thought it was bad enough that HR departments already ran listed companies in practice – because chief executives are mostly scared to stare down their increasingly woke claims – wait until the HR people actually do run the joint.
If you think this is fanciful, you haven’t been paying attention. The outcry was immediate, and predictable, when the Australian Institute of Company Directors recently produced figures showing that while women now comprise just over 40 per cent of non-executive directors of ASX 200 companies, only 11 per cent of bosses of ASX 200 companies are women.
Out went the cry: where are all the women CEOs? “The statistics on female CEOs are depressing,” said Nicola Wakefield-Evans, chairwoman of the AICD’s gender advocacy group, the 30% Club. “Boards need to look at the people coming up and ask why there are not enough women.”
As usual, the “one size fits all” brigade – who are not satisfied with equality of opportunity but want equality of outcome – miss the real point. The culprit is not negligent boards, lack of quotas, oppression or misogyny but that women very often make different choices to men.
It’s not as if there aren’t enough women at senior executive level – the available evidence suggests women are pouring into the executive level just below the CEO. However, they largely occupy what are called functional roles such as general counsel, executives in HR, communications or marketing roles; roles that do not have profit and loss responsibility. In other words, economic literacy, numeracy and making a profit are not criteria for these roles.
Plainly, women are not choosing the operational roles that run business divisions that do have P & L responsibility, and that are the traditional pathway to the CEO’s office.
A survey by Chief Executive Women in 2022 shows the problem. While the number of women in functional roles in ASX 200 companies had dramatically increased from 30 per cent to 40 per cent over the survey period (from 2017 to 2022), the number of operational or line roles occupied by women was much lower in an absolute sense and grew more slowly over the survey period, from 12 per cent in 2017 to 15 per cent last year.
This should come as no surprise: many men and many women like different things and make different life choices. While this is not universally true, most of us would recognise it as self-evidently and broadly true. So pack away your male oppression arguments for next time.
Let’s not argue about when these different choices first start to manifest themselves, but certainly by the time school students are selecting university courses they are in full swing. According to figures from the Workplace Gender Equality Agency, in 2019 women represented 59 per cent of enrolled domestic students across all universities or other institutions, but “women and men continue to follow different educational paths and the pattern of female and male segregation into different industries remains”.
Fields of study such as education, health, society and culture, and creative arts are female-dominated (more than 60 per cent are female), while information technology and engineering are male-dominated. For example, in 2019, women made up 74 per cent of education students while men made up 82 per cent of engineering students. Unless you believe there was some ghastly patriarchal overlord standing above young women as they filled in their university entrance applications, these represent genuine choices.
It should come as no surprise, then, that while the CEW survey in 2022 tells us that 82 per cent of senior HR roles and 59 per cent of corporate affairs roles in ASX 300 companies are filled by women, only 6 per cent of CEOs of ASX 300 companies are women. Damn these women. They just keep making choices they shouldn’t.
So what can we do about it? One option for the central planner and equality of outcome ideologues would be to simply force women, and men, to change their choices by application of strict quotas.
Starting at university, if not before, the entrance pool for all faculties and fields of study could be set at 50-50 women and men. That should lead to the entrance cohorts of every profession being 50-50 but, if it doesn’t, the central planners can apply more compulsion at that level too. And, if need be, we could continue the mandatory 50-50 split all the way up to CEO level. This should appeal to all those who say gender balance in itself brings benefits.
For example, CEW president Sam Mostyn says “better decision-making, execution and performance that generate higher profitability and stronger value propositions are just a few of the benefits the evidence reveals”. The finance department will perform so much better, according to this line of thinking, if it is 50-50 rather than 80 per cent male.
But here’s the hitch. Following their logic means the HR department must be 50-50 rather than 80 per cent female. Women in the HR department may have to observe quotas and may even be forced into departments they don’t care for.
This obviously won’t work. While women are quite happy to tell men their choices must give way to their social goals, CEW types are unlikely to be interested in the reverse.
That leaves the option I started with. If women won’t change their choices, we have to start changing the criteria used to pick CEOs – less numeracy, more empathy, so we can have equality of outcome (or “substantial equality”, as the Sex Discrimination Act calls it) among CEOs. That’s quick-fix central planning.
The final alternative is my favourite. Make sure we have equality of opportunity, and then leave men and women to make their own choices. If we don’t end up with 50-50, so be it. Women will be free to make their own choices, and companies will focus on the right skill sets, not gender.
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Another week, another dodgy diversity claim. If you’re yawning, fair enough. But if we don’t apply some logic to these claims, as and when they arise, we will soon lose sight of what logic looks like.