Golden Skirts & Tweedy Trousers

Graeme Samuel’s rather unfortunate public comments about the impenetrable "girls' club" in Australian boardrooms (the ‘Golden Skirts’) has conveniently taken the spotlight off the “Tweedy Trousers” club and ignored many of the real issues around Non-Executive Director recruitment.
These include:
  • Understanding that ‘a club is a club’ regardless of gender, so creating a ‘women’s director club as a replica of a men’s director club does not solve the issue of improving processes around NED recruitment.
  • Recruiting from your ‘BBQ Circle’ to avoid the risk of having someone on the board who you don’t know or someone in your network does not know. Nearly all boards, chairs and directors are guilty of this one at some point in time, and its understandable (if not ideal) as we generally like working within the comfort of our own ‘tribe’ and with people we trust.
  • Expectations of NEDs (in particular following the inquiry into the financial services sector) and whether NEDs are sufficiently compensated / remunerated for the risks they assume and the workload required.
  • What is the optimal number of ASX200 boards (or ASX equivalent boards) one male or female NED should serve on and is this something that needs to be addressed by the ASX Corporate Governance Council in its Principles and Recommendations?
  • Are we recruiting NEDs for the future or we still recruiting on an old model?
  • Why does the ASX200 – ASX500 (which has fewer than 10% female NEDs) largely escape scrutiny and action?  
Mr Samuels made the comments at the The Australian Financial Review Banking and Wealth Summit on 26-27 March 2019 in Melbourne. It created the predicted uproar.

In her column in the Weekend Australian (Boardroom Bandits only too quick to shoot messenger), Janet Albrechtsten asserted that a ‘Norwegian phenomenon has come our way’ and setting gender targets or 30 or 40 per cent for the boardroom has meant corporate Australia is ‘institutionalising female mediocrity.’ She went on to say that Australia’s cosy women’s club (read Chief Executive Women) has created jobs for a small pool of qualified female directors, who are getting all the gigs at the exclusion of everyone else.

Let’s look at the data.
According to the Australian Institute of Company Directors, there are 1,486 positions on the ASX200 occupied by 1,182 people, of which 303 (26%) are female and 879 (74%) are male. However, 58 of this group hold directorships on three or more ASX200 boards – 32 women and 26 men.

The respected firm Ownership Matters concluded that at the end of 2018, 38 female directors held three or more ASX200 board seats, meaning that (by a simple process of deduction) 6 women hold four ASX200 board roles.

Why does it matter?
So what? you might ask. Does it really matter that there is an elite club of men AND women snaring most of the ASX200 board roles? It’s a bit like the same athletes wining the medals all the time or the same student winning all the school prizes every year? We may not like it, but we grudgingly accept they are good at what they do. Rather than go about complaining about them all the time, we all tend to get on with trying to make the grade ourselves.

Is being a NED any different?

I think on balance that it is. The boards of our corporations and organisations need to reflect the people they serve – shareholders, customers, clients, stakeholders and, in the case of government boards, the community. They cannot be purely a club of men or women who pass the gigs between themselves supported and endorsed by head hunters. However, as indicated previously in this article, the issue of an ASX200 director club really has nothing to do with gender – and is far more complex than Mr Samuels and Ms Albrechtsen articulate.

Then maybe it was all really a storm in a teacup and it all just boiled down to the  fact that the corporate women Mr Samuels sees most regularly are undoubtably those in the ‘Chairman’s Lounge’, in business class and the offices of 101 Collins Street.
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