Diversity and Courage

Women on Boards Dinner
The American Club, Sydney
2 November 2006

They came. They saw. They networked. Sydney’s American Club buzzed with an anticipatory hum. Over wine a group of delegates discussed the merits of an electronic bartering system created by WOB director, Tracey Ah He . Over canapés a clique, led by strategic change consultant Desne Doman, of Doman Vaughan Consulting, exchanged ideas on how small not for profit charities can achieve tax deductibility from the Australian government. In a small enclave overlooking the harbour, Juantia Hamparsum, director of Kalori, and Danielle Press, Deputy Head of CRMBD at UBS, debated changes to the global grain industry. So began the annual Women on Boards (WOB) networking dinner.

Sponsored by UBS and MCd by Sally Loane, Director of Media and Public Affairs with Coca-Cola Amatil and former ABC broadcaster, the event attracted over 160 delegates. Participants included a diverse range of participants, from small to medium enterprise entrepreneurs through to corporate and investment banking senior executives – eager to engage with established company directors. The dinner represents one of the key initiatives of WOB, a national program to improve the gender balance on Australian company boards through skills-based selection.

WOB chair Ruth Medd opened proceedings with some sobering data: “Fifty per cent of the ASX200 companies don’t have any women on their board,” she highlighted. According to Medd, the statistic bears eloquent testimony to the need for such initiatives as WOB.  “The great challenge will be bringing the next generation of young women through to fill available board positions,” she said.

A recent survey, commissioned by WOB and conducted by independent consultant Genroe, demonstrates the initiative is beginning to gain traction. According to the survey, there has been a 10 per cent increase in the number of network members who are directors on paid and unpaid boards compared with the 2005 survey. The increase in paid board positions was 11 per cent for those holding one directorship and 85 per cent for holding two directorships. For unpaid board positions the increase was 13 per cent for those holding one directorship and 11 per cent for those with two.
Of the 500 women who responded to the WOB survey, 37 per cent (185) had applied for a board position within the past year. So it was no surprise that the event, featuring a trio of experienced directors, was so enticing for both established and emerging directors.

Moderated by Sally Loane, the panel navigated the key issues facing women on boards or contemplating directorships.

The first step

“Your first board is always the hardest,” commented Carolyn Hewson, Director of Westpac Banking Corporation and AGL. Hewson, who currently has Board and advisory roles with the Royal Humane Society, YWCA of NSW, the Australian Charities Fund and the Neurosurgical Research Foundation, spoke with evangelistic zeal on the issue of personal references. “Networking is great, but personal references are essential,” she commented. Hewson’s own genesis as a board director reflects this reality. When Hewson was approached for the first executive board position with Schroders Australia – where she worked for16 years in the areas of treasury, capital markets, risk management and funds management - she was immediately assured by senior colleagues that they had recommended her. Of course, the wife of another Schroders director with whom she served on a not-for-profit board said the appointment was due to her recommendation, and the Chairman of the board revealed he’d heard her give a speech on the economy, which had tipped the balance in her favour. “I thought it was because I’d worked hard,” she added wryly. “But it does demonstrate the power of a personal recommendation.”

For Hewson, a key question for aspiring board members – particularly those eyeing publicly listed companies - is: why do you want to be on a board? “When things are going well it’s boring; when the company isn’t going well you don’t want to be there,” she says. The issue of motivation is vital to resolve before seeking office, particularly given the time investment required on public boards. Hewson believes many of those aspiring to non-executive directorships are motivated by a desire for a better balanced working life and for the greater recognition inherent in a board role compared with an executive role. But she warns that there is a trade-off for the greater flexibility in serving as a non-executive director – especially when companies go through difficult times, as they all inevitably do at one time or another.  “Last year AGL and Alinta had over 60 meetings between them,” said Hewson – a significant workload indeed.

Hewson said the attraction for her is all about love of strategy. “Non executive directorships give you time to think; time to strategise. Executive careers can become so narrow – I love the diversity of boards.”

For panelist Jane Allen, Partner at Egon Zehnder International, where she leads the Consumer Products Practice Group across Asia Pacific, references are particularly important for emerging directors. Equally important to changing the gender balance is a commitment from boards to diversity. “Diversity has to be a deliberate policy. It’s not just a nice idea; there is hard data to support the positive impact of having more women on boards.” According to Allen, there are just two female chief `executive officers in the ASX50 – St. George Bank’s Gail Kelly and Telecom New Zealand’s Theresa Gattung. Twenty three per cent have no women on the executive team or on the board. Of the 390 available board positions, just 10 per cent are filled by women. Of that group, 30 are in functional roles, which leaves just none women in line roles. Allen recently authored a paper, Women on Boards: Why Would You Do It, which explores the economics of the impact of women on boards – for a copy of the paper, see the WOB website.

Allen is adamant that women also need to commit to change by taking some risks. “I’ve approached a number of women to take major board positions and they have refused. Diversity begins where courage begins,” she commented. Allen implored delegates to face the fear. “Even if a board `seems out of your league, jump in, ask for feedback, take advice and stretch yourself.”

Where have all the women gone?

GrainCorp Chairman Don Taylor faced a stiff opening question: why are there no women on the board of GrainCorp? Taylor stared down his audience, however, and batted the potential grenade right back, confirming that there are no women on the board of GrainCorp. “But how many men ore there on the board of WOB?” he questioned.
According to Taylor, the absence of women on the GrainCorp board reflects a frustrating rural reality: “There are simply few women appropriately skilled to contribute to an agribusiness board. Those few that are tend to be running family businesses, which are very demanding – they don’t aspire to fill board roles. Many other rural women tend to be engaged in service industries, such as teaching or healthcare, which do not provide the right skills for a board,” he commented. “And the reality is, I must choose the best when looking for board members.”

Taylor explained that the unusual composition of the GrainCorp board was problematic in and of itself, with board 60 per cent of board members derived from other constituent boards. “These representational board members tend to have the same skill sets. We only have the opportunity to independently choose four board members to balance out the skill sets,” he said.

The absence of women on the GrainCorp board reflects a wider rural malaise, added Taylor, with few women choosing to pursue engagement at board level. “The biggest challenge going forward is how to groom the next batch of rural women for boards.” 

A monstrous regiment of women

MC Sally Loane plunged bravely into one of the key issues confronting many female directors: the perception of being a “difficult woman”. “There are sensational women in large organisations being sidelines because men are scared of them,” commented Jane Allen. Not that the men are always in the wrong, says Allen. “Many women have style issues – some need to rethink how their influence and collaborate with other board members.” According to Allen, the style issues may be a legacy of the executive role many women hold before they move into board positions. “Executive roles are often defined by taking hard lines and sticking to them. Board roles are much more about negotiation and influence.” For Allen, true thought leadership comes down to balancing independence and collaboration:  You don’t have to be half man-half desk, but you do have to get along.”

Hewson also highlighted the need for a more collaborative approach when sitting on boards and the gulf that often opens between executive and non executive directors. “There is a definite distinction between executive and non executive board directorships,” she commented, “and boards often don’t work when they don’t see that line.” Hewson conceded that the style issue can often negatively impact a board, but said that there was often an inequitable reaction to the high maintenance man and the high maintenance woman. “A difficult man is seen to be thinking outside the box; a difficult woman is a pain in the backside.”

The solution to either, said GrainCorp’s Taylor, is a strong chairperson. “Managing the personalities in the room can be a difficult challenge but you want diversity of opinion – you don’t want just one ‘type’ on a board.” For Taylor, a board is like an orchestra: “The musicians need to strike the right notes at the right time to get the best result – it all depends on the conductor.”

According to Taylor, a key skill for a chairman is assembling a panel of board members with complimentary skills. “They can be as rude as they like across the table, as long as they come in the right frame of mind.”

Mentoring sessions

Delegates were given the opportunity to talk as well as listen in the second half of the evening, which was devoted to two mentoring sessions. The mentoring sessions included some lively discussion and debate as delegates came face to face with 16 established directors.

Delegates rotated between the tables of the mentors, who moderated Q&A sessions regarding their own board experiences and supplied observations about the issues women face on boards. Mentors provided feedback to delegates looking to join boards and answered questions from women currently sitting on boards and facing some difficult issues.

The range of issues discussed around the room seemed infinite. Delegates from private boards were keen to discuss how to handle business owners within a board context; public company directors spoke about dealing with politicians and handling regulatory issues. Experienced directors spoke about dealing with unskilled directors, while emerging directors had questions about selling their broad rather than specialist skill sets to boards. Some of the journalists in the room were keen to explore the impact of media on boards, particularly in times of stress – for them, a key issue is the extent to which boards are willing to engage with the press.

Don Taylor, in his capacity as mentor, again faced some straightforward questions about the role of women on rural boards. The mentoring session gave Taylor the opportunity to discuss the issue in greater depth and explain the structure of rural family businesses and the role of women within those businesses. He was also asked to discuss strategies for dealing with a poorly-performing CEO – an issue one delegate director is currently facing. Taylor talked through an appropriate strategy, which included collaboration with other board members, confrontation with the CEO and an invitation to change. “Not confronting as issue such as this early is a big mistake,” said Taylor. If change is not forthcoming, Taylor advised leaving the board. “If you are not comfortable with the direction in which the board is moving and you don’t see hope for change, you should consider leaving.”

Ian Blackburne, Chairman of CSR, held court at another mentoring table. His advice to delegates included: different styles for different situations; understanding the priorities of the board; the differences in size and types of board – form large public boards through to private boards; and knowing what strengths you bring to a board.

Blackburne’s key message was the importance of understanding boardroom dynamics. “You learn the balance of a board over time. You learn when to speak and when to listen. You learn that the balance of the board shifts over the life-cycle of the company, depending on the key issues confronting that company at any given time,” he commented.

In addition to the panel and MC Sally Loane, mentors included (biographies correct as at November 2006):

• Yasmin Allen - non-executive director of Insurance Australia Group (IAG), the Federal Government’s Export Finance and Insurance Corporation (EFIC), Macquarie Bank’s Global Infrastructure Fund and Film Australia. She is also a member of the Salvation Army Advisory Board and the Australian Chamber Orchestra’s Developmental Advisory board
• Ian Blackburne, Chairman of CSR ;
• Bonnie Boezeman, Chairman of PayPal Australia, Deputy Chairman of NSW State Lotteries Corporation, director of Darling Harbour Foreshore Authority, Chairman of the Catholic Development Fund, director of the Order of Australia Foundation Association and on the advisory board of Cypress Lakes Golf & Country Club. She is Chairman of the East West Foundation, and a member of the NSW Corporate Olympic Committee. 
• Helen Cameron, executive director of Citigroup Investment Research in Australia and New Zealand. 
• Anna Haynes, Non-Executive Director of Promina Group Limited
• Emma Stein, Non-Executive Director on the boards of DUET, Integral Energy and a junior oil and gas exploration and production company. She supports the University of Western Sydney as a member of the Strategy and Resources Board Committee;
• JoAnne Stephenson, National Partner-in-Charge of KPMG’s Risk Advisory Services practice and is the Lead Partner of KPMG’s Victorian Government services practice. She is a Trustee of the Shrine of Remembrance Trust and a Board Member of Zoos Victoria. .
• Sam Weiss, Lead Independent Director and Deputy Chairman of GLG Corporation Limited, Chairman of Ecos Corporation, and an independent Director of OrotonGroup Limited, Canterbury of New Zealand Limited,  Easy Being Green and Open Universities Australia.  He is a director of The Sydney Festival, The Benevolent Society, and the Harvard Alumni Association.
• Melanie Willis, Director of listed companies WHK Group and Aevum. She is also on the Board of Hydro Tasmania
• Lynn Wood, Non-Executive Director of HSBC Bank Australia Limited, GPT Funds Management Limited, MS Limited and MS Australia Limited. She is also a Member of the Foreign Investment Review Board, a Compliance Committee Member of two major fund managers and Chairman of the Audit Committee for the NSW Government Dept of Natural Resources.