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Women winning battle of the boardroom, now for CEO jobs

Legislated quotas forcing companies to have a level of female representation on boards was not the answer to empowering women, according to research from the University of Queensland.

Jul 26, 2022, updated Jul 26, 2022
Mandates for women not as effective as support and skill

Mandates for women not as effective as support and skill

While companies reported significant benefits from the inclusion of women on boards, in places like Norway where the Government has mandated a 40 per cent quota for women on boards, the outcomes they thought they would achieve had not eventuated, according to associate professor and study co-author Terrance Fitzsimmons.

He said the bigger issue was that only 5 per cent of chief executives were women.

“Organisations need to start looking at their executive ranks and working out how they can bring more women into executive and CEO roles,” he said.

“It means getting more women into operational roles, addressing the division of domestic labour and gender role stereotypes and introducing universal free childcare.”

He said there were genuine benefits from the inclusion of women on boards, including better financial results for the company, but mandates were not as effective as skill and support.

“Companies only reap the benefits of diversity if gender is not the top criteria,” he said.

The study interviewed 45 chairs of large ASX companies and most held a positive view about the influence of women on boards.

The feedback found the chairs believed female board members enhanced debate, challenged views, provided clarity and decisiveness, raised the level of professionalism and enhanced behavioural norms.

But Fitzsimmons said mandated board roles could affect a woman’s own beliefs about her abilities.

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“Quotas may actually undermine the woman’s sense of self-efficacy and if board members believe the appointment wasn’t made on merit her impact can be neutralised,” he said.

There were no legislated mandates in Australia for board diversity, but in the past decade boards had shifted along with social and shareholder demands.

Within ASX companies the representation of women on boards has grown from 8.3 per cent in 2009 to 34.7 per cent, but a significant number of boards had failed to move to anywhere near that level.

“We should revert to considering quotas if this rate of progress stalls,” Fitzsimmons said.

 

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