Senator for South Australia Penny Wong delivered this speech when she was Minister for Finance and Deregulation.
Her view on closing the gender gap in Australia is that progress cannot happen automatically; it must be spurred on by individuals.
Closing the gender gap in Australia speech by Penny Wong to CEDA
Senator the Hon. Penny Wong
As Finance Minister, my role is often seen as a dry one: watching government spending closely, keeping the Budget on track, saying no to other ministers, and chasing efficiencies.
Yes, it’s true that those things are a large part of my job, but one of the privileges of being the Minister for Finance is that you work at the centre of government, and this means the opportunity to influence and implement change in how government functions. In this context, one of my priorities has been to look at the ways in which government as an institution can help improve the gender balance in Australia’s boardrooms.
It’s very clear – whether it’s in the private sector or in the government – that there is still a lot of work to do to ensure boardrooms better reflect the diversity of our community. This is not simply an issue of representation. It is an issue of ability. If we’re not fully using the capacity and talents of over half of the population, then we’re holding ourselves back.
Julie Collins, as Minister for the Status of Women, my colleague, is doing great work to advance equality for women in both the private and public sectors. On this issue, government can demonstrate real leadership. By improving diversity on government boards, we can effect positive change on boards across all sectors.
Before I get on to that specific issue, I want to start my remarks today by discussing briefly the broader issue of gender equality and the imperative for change.
Like many, I start from the proposition that there should be equality in all aspects of our lives. Whether it’s on the basis of race, gender, ethnicity or any other attribute, we should be striving for a society where all people are judged on their abilities alone. This has long guided my approach to public life, and in fact, it’s been a guiding principle in all aspects of my life.
The principle of equality is fundamental to who we are; it is part of our collective philosophical foundations. It has been one of the most enduring forces in our community. But it is not only about the community, it is about individuals. It is about individual aspirations, about enabling every citizen to realise their full potential.
So, when we speak of equality – whether in terms of representation around the boardroom table or the achievement of equal pay – it is not simply a matter of fairness, although it is that too. Equality is more than trying to get an equal share. It’s actually about the nature of our democracy. It’s about enabling every citizen to achieve – and to have every opportunity to achieve – according to their capacity. It is about ensuring that no individual is constrained because of their gender, their racial or cultural background, or their sexuality.
Just as the individual benefits from equality, so too does our society as a whole. Sadly, this is one aspect in the case for equality that is often overlooked. We all beneft if achievement is based on capacity because that is when the best person gets the job.
In Australia, we have certainly seen signifcant change over what has been a relatively short time span.
If I look at my mother’s generation: their prospects for employment were typically limited to clerical, teaching or caring roles, and women were expected to retire from the public service when they got married.
Indeed, if I think back to the expectations this society had of my mum and her four sisters growing up in the 1950s, they were so distant to the aspirations that I was lucky enough to have when I was young. I don’t know how many of you are Mad Men fans, but if you watch an episode of the Mad Men series (as good as it is), you can’t help but be struck by the unremitting sexism of the time it portrays.
Thankfully, the steps we’ve taken, and that have been taken around the world since the post-war era, have seen Australia become a different country; a more equal country.
Of course, there is still more to do and the change is incremental, which is to be expected. Each generation is informed and shaped by the generations that preceded it. As each generation moves closer to an equal society than the one before them, improvement is made.
Today, you see a female Prime Minister and a female Governor-General. There are three female Justices on the High Court and two state governors are women. Increasingly in business, women are holding positions of influence and we have women in leadership roles in the fields of law, medicine and science.
But the fact that all of these are still noteworthy probably means we still have work to do. Because actually, they should be unsurprising.
My hope – and I believe this view would be shared by everyone here – is that the steps our generation has taken will mean that my daughter and her generation, and all the women that follow, will have an even greater opportunity to succeed on the basis of their abilities.
But we must remember that the momentum for change is not automatic. Just because we have witnessed change from my mother’s generation to mine, does not mean progress will continue for the next. It must be spurred on by committed individuals. We cannot rest on our laurels and assume that time alone will see equality occur. It always requires constant attention to not only make progress, but also to ensure that the progress made is not unwound.
As a Labor Government, we understand that real equality requires redressing many factors of disadvantage. In large part, our focus is on measures to improve women’s economic security.
Despite making up 45 per cent of the taxpaying workforce, on all measures of economic standing, women tend to be left behind. We still tend to earn less than our male counterparts, and due to time out of the workforce for those who choose to have a family, often retire with substantially less superannuation.
We’ve gone some way to addressing these inequalities. Our reform to triple the tax-free threshold will see over 350,000 Australian women no longer pay any tax. And for the 2.1 million women who earn less than $37,000, they’ll no longer have to pay tax on their superannuation contributions, boosting their nancial position after employment.
What does this all mean? It means fewer barriers and more opportunities forwomen at all stages of their lives. It means economic security and the freedom to pursue new careers and move cities to seek new employment. It is also why our Government supports women’s participation, which is highlighted through our investments in skills development and supported by accessible and affordable child care. Our reforms to child care have seen spending double, with the Government now contributing close to $4.5 billion this year.
And we’re very proud to have nally introduced the first paid parental leave
scheme in Australia, which is already benfi ting over 150,000 parents across the country.
When I first graduated from law school I can remember people then talking about the importance of paid parental leave. It certainly took a long time after that to achieve it nationally.
The introduction of the Fair Work Act has also led to the historic pay equity claim in the social and community services sector, recognising for the first time that equal work should actually get equal pay, and the introduction of the Equal Opportunity for Women in the Workplace Amendment Bill 2012 would also drive changes in workplaces across the country through increased transparency and accountability.
The Government has also committed to a target for women to make up at least 40 per cent of positions on Australian government boards by 2015 – something I will come back to shortly.
These reforms will continue our progress to a more equal society. They are the steps being taken to continue to achieve the goal of equality.
Within the broader spectrum of advancing the status of women, improving the presence of women in Australia’s boardrooms is an area of particular interest to me. Unfortunately, the arguments for equality have not suffciently influenced the makeup of our boardrooms. Currently, just 14.4 per cent of board positions in the ASX top 200 companies are held by women. Of course, we should not discount the fact that this is a solid improvement from the 8.4 per cent in 2010, but clearly what the figures show is that something is still hindering the involvement of women on boards.
Increasingly, the economic imperative of board diversity is influencing decision- makers. And, while we should not give up on arguments based in equality, perhaps the economic arguments may be more influential. For example, a recent study by Credit Suisse directly addressed the question of whether gender diversity in corporate management improves performance. The report found that over the six-year time series they analysed, companies with at least some female board representation outperformed those with no women in terms of share price. Large firms with greater than US$10 billion market capitalisation that had female board members outperformed those without female board members by 26 per cent over six years. For smaller firms, the differential was 17 per cent. While the causality behind these findings is no doubt going to be contested, the results, I think, speak for themselves.
It seems that the business and investor community is noticing, as the report found a clear trend towards greater female board representation internationally. In 2010, the ASX released changes to its Corporate Governance Principles and Recommendations that introduced recommendations relating to diversity.
A report released a couple of weeks ago by the ASX found that the majority of entities within the sample reported had established diversity policies that generally stretch well beyond gender. Furthermore, more than half of the entities that had a diversity policy reported measurable objectives for achieving gender diversity. These are positive results, and indicate a genuine shift in the thinking of corporate Australia, which is welcome.
Business leaders are similarly taking the initiative, with groups like the Male Champions of Change advocating for change. And more business leaders are taking a leadership role in improving gender diversity, but the size of the challenge still means that all sectors need to do their part. To that end, I see a role for government to complement and supplement the work of the corporate sector.
As I mentioned earlier, the Government has in place a target of 40 per cent of government board positions to be held by women by 2015, and we are on track to achieve this. But even in government, we face difficulties identifying candidates. Often the same candidates are put forward time and time again. This is not to say they aren’t well qualified for these roles – of course they are – but we often struggle to identify the many more talented women we know are out there. In part, this is a function of historical disadvantage and also past practices.
When I became Minister for Finance I recall being presented with an all-male shortlist for a board appointment, to which I responded that if we couldn’t even find a suitably qualified woman to shortlist, let alone appoint, then we probably had some work to do.
That is why today I am announcing that the Government will establish a Women on Boards Network to form better connections between Government and potential candidates. This network – which will be supported by the Department of Finance and Deregulation and the Office for Women – will identify potential candidates for government board positions with a key focus of the network being the appointment of women to their first board. Indeed, one of the obstacles confronted by women across all sectors is that prior board experience is often required for appointments.
One of my male ministerial colleagues told me that he had improved the
gender balance of shortlisted candidates by removing past board experience as an essential criterion. But even when it is not part of the selection criteria, it can often be implicit in the selection process. With women holding so few board positions across the country, this practice amounts to a structural impediment. That is why the early focus of the Women on Boards Network will be quite explicitly on getting women on their first board, to give them the start and the experience.
I believe this network will be a springboard for women into board positions. We will see an increased number of women with board experience, and so expand the pool of candidates for corporate Australia to draw on in their own appointment processes. And I hope that, over time, women who start their board careers in government will go on to successful careers in business, and that they become the future leaders of change.
I will soon be writing to business leaders, stakeholders, advocate groups and peak bodies seeking their involvement in the network – and I look forward to working with them and we’ll formally launch the network later this year.
I want to stress that what I want to see is an iterative and evolving process because what we need is the network to be able to change over time to respond to the needs of candidates and of government, and to build on the work that has already been done in the private sector.
When I began my remarks today, I outlined the importance I place personally on achieving equality.
It has been a constant in my life and it will remain so. In the sweep of time, progress between my mother’s generation and my daughter’s will be profound, but this type of change takes time. It always takes longer than it should. But it also takes perseverance. There is a role for all of us to play here – for today’s business leaders and tomorrow’s. There is a role for government and business leaders and for everyone here today, and for women across Australia. Because we should never forget that the changes we make will shape the opportunities of future generations.
1 Fair Work Act 2009 (Cth)