High price of a seat at the table

Catherine Brenner at AMP’s annual meeting in Sydney last year. Picture: AAP

A couple of years ago, the then president of Chief Executive Women, Diane Smith-Gander, applauded the fact we were ­finally starting to have what she called “proper conversations about quotas” for women. Hooray, indeed. Smith-Gander, who is the queen bee of female quota activism in Australia, then gave the game away. She said: “People have moved past the idea that quotas are wrong.”

The problem with her “proper” conversation is that it’s more of a sermon, failing to acknowledge that many people have legitimate concerns about quotas, and targets too. If debate isn’t permitted, that’s a shame because there is much to contest.

All the more reason for a genuine hooray this week with signs of a proper conversation starting up about female targets and quotas. That’s the upside of the brouhaha over Catherine Brenner, the former chairwoman of AMP, who was forced to resign this week after allegations of misconduct against the 170-year-old financial services giant she led.

Finally, some brave souls are raising questions in public about the possible consequences of the rapid push for targets and quotas for women, and whether it means placing women on boards who lack the requisite skills to lead a large corporation.

For too long this has been the dirty little secret of corporate Australia, discussed quietly by both men and women in safe places far away from the activists at Chief Executive Women.

Brenner’s spectacular fall, from being the 47-year-old chairwoman of a leading Australian company, raises uncomfortable questions, not just for the former AMP chairwoman and the board that appointed her in 2016, but for wider corporate Australia and those who seek special favours for women.

Diane Smith-Gander. Picture: Colin Murty

Brenner’s critics allege that she overcame a lack of qualifications by pursuing David Gonski, a well-positioned director known for his cohort of “angels” — women he has mentored on to boards.

Before taking up board seats on Coca-Cola Amatil, Boral and becoming chairwoman of AMP, Brenner had not run a big company, nor was she a direct report to a chief executive. One report described her as a “middle-ranking executive in a middle-ranking investment bank”.

Yet Brenner was picked by the board of AMP over Andrew Mohl, a more qualified man who had run AMP and saved it from bankruptcy more than a decade ago. And her time at AMP was controversial, featuring ill-advised public criticism of her chief executive, poor financial results and a significant fall in the share price.

When misconduct is uncovered in a corporation, the buck stops with the chairman. No ifs, no buts. Brenner had to go, but many seasoned observers thought her tardy departure and less than fulsome contrition raised further questions about her skill set.

Brenner has copped plenty of criticism this past week. Some may be fair and some certainly was not. But the more important point is that we are entitled to ask, ­beyond AMP and Brenner, whe­ther women are being appointed to senior positions lacking the necessary skills, and what that means for the leadership of ­companies.

“It’s an extraordinary slur,” Smith-Gander said this week about these legitimate questions. But it’s not a slur to ask whether it is desirable to pursue gender equity at the price of corporate meritocracy. That is the consequence of putting gender ahead of skills, appointing mediocre women who lack the hands-on experience of some men that is critical at board level.

Australian Institute of Company Directors chairwoman Elizabeth Proust lamented that people were “responding to issues coming out of the royal commission through a gender lens”.

Alas, it’s not credible for supporters of targets and quotas to create a gender lens, then cry foul when some raise legitimate questions about it. Self-censoring these kinds of conversations because they are uncomfortable ­under­mines genuinely talented women and threatens to dumb down the governance of Australia’s biggest companies.

These questions are especially pertinent right now because the AICD has a target for women to fill 30 per cent of board seats for ASX 200 companies by the end of this year. With fewer than seven months to go, that would require an unofficial 100 per cent female target for the rest of the year for board vacancies if the 30 per cent target is to be reached. In other words, men need not apply. That’s not as crazy as it sounds.

Chairmen and headhunters appointed to fill senior board seats face a dilemma. While they have to be seen to search for the best candidate, meeting the AICD’s ­aggressive timetable inevitably means striking out men to reach the 30 per cent target this calendar year.

Even if legal, and complying with discrimination laws requires some soft shoe shuffling, female targets are a sure breach of feminist empowerment. They mean that in 30 per cent of cases, or in 100 per cent of cases for the rest of this year, gender is a more important factor than merit. Targets, and quotas, give special favours to women, depicting us as the weaker sex in need of a leg up to compete with men.

Why shouldn’t we ask whether those most in favour of gender deals are those with less merit, who couldn’t secure their swag of positions without them?

This paternalism is promulgated by women such as Smith-Gander and Proust and is boosted by the Male Champions of Change, men in corporate Australian who have convinced themselves that gender tokenism is the only way to treat their unconscious bias against women. These champions of change should start checking in on change. Are they helping to create a new gendered protection racket for less qualified women, and what does that mean for shareholders, customers and other stakeholders?

A few years ago, the then boss of the Business Council of Australia, Katie Lahey, asked a rhetorical question: Who wants to get a call from a headhunter about a job that effectively translates into “woman required for this position”? Not those who have the merit to achieve on their own.

It harks back to an episode of Yes, Minister where Jim Hacker wants a 25 per cent quota for women. When he offers a job to a woman, she declines, saying: “I didn’t ask you to fight a battle for me. I’m not pleased at being part of a 25 per cent quota.

“Women are not inferior ­beings, and I don’t enjoy being patronised. I’m afraid you’re just as paternalist and chauvinist as the rest of them. I’m going somewhere where I shall be accepted on my own merits, as an equal, as a person.”

Today, some female directors love paternalism and they don’t mind their quota appointments, either. Last year female director Sam Mostyn said she was proud to be a quota appointment to the AFL Commission. A few months ago Smith-Gander told a Perth audience that she “couldn’t care less whether I get in because of a quota because I know I will not offer ­myself for a board for which I do not have merit”.

What if other women are not so discerning and secure board positions because an imposed target or quota matters more than merit for the position?

There are pragmatic, and selfish, reasons that may explain why some women get excited about targets and quotas. Gendered ­appointments create “ka-ching” time for existing female directors by boosting their market value in a limited pool of potential female board directors.

To be sure, a few new female ­recruits will enter boardrooms, perhaps a few new proteges from the Gonski stable — even Charlie allowed for angel turnover. But the shallow pool is a reality of ­female progress being slower than men in executive ranks of ASX 200 companies.

In Norway, home to legislated quotas for women on corporate boards, it became known as the golden skirt phenomenon — a small pool of golden skirts whose value rose with gender targets as they accumulated multiple board seats.

In some spheres, quotas have become the newest anti-competitive rort: a restrictive trade practice that showers jobs, position and money on those who could not ­acquire them without assistance.

Female barristers are particularly adept at it. Their sister solicitors have proved that all that is needed to get to the top in law is patience and hard work. Yet a growing breed of female barristers demands briefs and senior counsel titles without paying the same dues as their male competitors.

Some will say that gender targets and boosted market value for some women simply addresses a historical wrong. There was a men’s club for board appointments and now there is a women’s club. Except the difference is that the undoubtedly tight men’s club of board appointments includes many more men with senior executive experience of running companies than is the case in the cliquey club for female directors.

Replacing one protection racket with another one that includes less qualified women isn’t a great way to run companies.

According to the Male Champions of Change: “We need more decent, powerful men to step up beside women in building a gender-equal world.” The ruse of painting this as an irrefutable moral agenda is starting to unravel. A report released last year by CEW and the Male Champions of Change said: “If we continue to ­define ‘merit’ as people ‘like us’ who have done what we did, we will get more of the same.” But what if people “like us” means people with credible experience at running big companies?

Surely more of those people is good for shareholders, customers and other stakeholders.

It’s near impossible for corporate Australia to raise these questions when naming and shaming companies that fail to meet targets is common practice, with the AICD releasing a regular gender diversity progress report.

And, anecdotally, the harassment of allegedly recalcitrant boards behind closed doors is even worse, but no director is brave enough to name and shame the harassers. Staying quiet makes life easier, at least in the short term.

Last September Proust said the AICD board would meet early in 2018 to look at what else the AICD could do and “all options have to be on the table”, including whether the AICD should advocate for board quotas.

For someone who has said she is reluctant to support quotas, Proust sure talks about them a lot. “If we’re not able to see genuinely diverse boards then governments are likely to take action,” she said.

If all options are on the table, that should include what’s wrong with targets and quotas. That will ensure a proper conversation.

Janet Albrechtsen has sat on two government boards and sits on the board of a think tank.