Malcolm Gladwell who popularised the phrase ‘The Tipping Point’ as the title of his best-selling book defined it as “the moment of critical mass, the threshold the boiling point”. Often the tipping point in significant social movements is recognised only in retrospect. However in the march to give women their rightful role in large public companies it seems that we are able to recognise that in 2015 that very milestone has arrived.
For many years the moral arguments against the glass ceiling and the economic arguments positing that companies profit when their boards are diverse made little headway. The percentage of women on the boards of the largest public companies in the U.S.A, and the U.K remained obstinately below the 20% mark until about 2010 and in Australia it was below 10%.
Now in developed economies the U.S.A.,U.K, Australia, Europe and Canada and even surprisingly in India and there are discernible changes as women start occupying more seats on company boards. Incremental steps originating from a variety of quarters have begun to create momentum for change. That change is almost certainly now unstoppable.
The impetus to implement concrete changes for women in the workplace is now coming from both sides of the gender spectrum. Men are acknowledging that the system is unfair and needs to be changed. Women are increasingly recognising that they are not powerless and are beginning to use political leverage and economic muscle to force change.
Norway in 2006 was the first country to legislate a quota of females on its boards (40%) and it was followed by France, Spain and the Netherlands. The Bombay Stock Exchange of India in 2014 mandated a minimum of one female director in every listed company.
The dramatic move by Norway signalled that at last, one country was prepared to take serious steps to redress a glaring inequity in the workplace. The consequence of this has been a significant re-think in other countries. It has injected an element of urgency and resolve to reach the goal of adequate female representation within a plausibly acceptable time-frame.
For those countries seeking alternatives to quotas other routes have been found to advance women on boards.
Firstly there are Voluntary Targets. In the UK in 2011, the government fixed the target at 25% female directors by the end of 2015. That goal was willingly adopted and is likely to be reached with female board representation already at 23.5% by mid-year.
A second option is internal corporate programs allied with transparent reporting mandated by external regulation. In Australia for example, the ASX guidelines incorporate a ‘comply or explain’ rule with respect to the advancements of gender diversity has had rate worthy success. The percentage of women on ASX 200 boards has risen from 8.3% in 2009 to 20% in 2015 with the Australian Institute of Company Directors pushing for a 30% target by 2019.
Naturally companies which depend on female consumers or those with high proportions of female employees are more likely to be in the forefront of those by actively seeking to appoint female directors.
And of course there are laggards in all countries -those that are simply unwilling to act or believe that they are immune to the forces for change. They are almost certainly on the wrong side of history. At the beginning of July, the Australian Council of Superannuation Investors wrote to the chairpersons of 32 ASX 200 companies without any female directors asking for an explanation for this state of affairs. Since the members of this organisation control some $1.6 trillion in investor funds, their disapproval is likely to carry some considerable weight.
The movement to achieve respectable representivity of women in Australia’s leading companies is gathering momentum at last. A corner has been turned and there will be no looking back.