Often, "international" days do not make a big impression on Australians. However, International Women's Day 2011 should resonate more strongly with business than in years past.
Not only are we hosting an international gathering of Advance (a global Australian expatriate network) female and male leaders, but we are also in the first year of the ASX corporate governance council guidelines' diversity requirements and the eyes of the world are on us.
We have come up with an approach led by business that has provided a strong catalyst for change. The challenge will be to maintain momentum, bring about cultural change and meaningfully increase the number of women in senior roles across business.
In the race to harness top talent and have a productive and engaged workforce, recruiting and retaining talented women is the latest (and perhaps greatest) strategy for business and indeed the country.
The business case for increasing the number of female directors and senior executives is clear and closing the workforce participation rate between men and women could boost Australian GDP by 11 per cent.
European countries are increasing the numbers of female directors in major listed companies through quotas. Norway leads the way, with 32 per cent female representation at board level, followed by Sweden (27 per cent), the US and France (15 per cent), Germany (13 per cent) and Britain (12 per cent).
On this measure of the leading companies (ASX 200), in 2009 Australia was leading the world in going backwards, having slipped from 8.75 per cent in 2006 to 8.3 per cent, with more than half the top 200 companies with no female directors. It was a realisation of how behind Australia was on these measures that galvanised business to act.
Australia, however, has chosen to focus on individual company set targets rather than moving straight to government legislated quotas. We are fortunate to have a framework established by most major business and investor organisations the ASX corporate governance council guidelines and diversity requirements were inserted into these guidelines (effective this year) to require companies to determine and disclose their own targets for females at the board, senior management level and throughout the organisation on an "if not, why not" basis.
Companies will be reporting on these measures this year and each subsequent year, and the ASX will be collating and publishing relevant data.
Having voluntary but transparent targets driven by business has major initial advantages over quotas. They are culturally aligned with the Australian spirit of doing one's own thing; they focus on women in management as well as on boards; and because business has to bring about the change, they offer the possibility of sustainable cultural change.
Since the guidelines were announced (but even before they came into effect), Australia moved last year from 8.3 per cent of female directors of the top 200 companies to 11.2 percent, and the appointment rate of female directors to the top 200 during last year increased from 5 per cent of appointments to 25 per cent. Something is working. I believe the dialogue among boards, chief executives and even women has shifted from analysis of the problem and opinions about whether, why and what should be done, to how can we make this happen. By changing our focus, accepting the imperative for change and sharing knowledge and success stories, a momentum for positive, sustainable change is occurring.
There is growing international interest in our model, particularly in Britain and the US. Indeed, the report by Lord Davies in Britain, which has just been released, recommends a very similar model.
In October last year, I was fortunate to be part of an eight-person Australian delegation to the Women's Forum for the Economy and Society in France and had the opportunity to explain our approach. Women from all over the world found Australia's approach intriguing and agreed it had potential advantages over quotas, but queried whether listed companies would really introduce these changes on a voluntary basis, driven by self-interest, peer pressure and disclosures.
The early signs are very encouraging, but we must recognise that the governance guidelines will not be sufficient and a host of other initiatives are required to maintain momentum. Many of these are happening. These include provisions at the organisational level (flexible work, childcare arrangements, sponsoring of women) and the government level (targets for government boards, maternity leave).
Programs for mentoring of board-ready, senior and rising-talent women by chairmen and CEOs are occurring. Senior male and female leaders in business, professional service firms and government agencies who are prepared to make the change happen in their own organisations and champion it elsewhere are speaking out. Education, strategies and practices are being shared across organisations.
This matrix of change needs to continue in order to maintain momentum.
I believe the government also needs to amend its procurement requirements to ensure companies and professional service providers are able to tender for government work only if they nominate, work towards and are on track to achieve targets that establish a critical mass of women (between 25 and 35 per cent) at all senior levels.
Change is occurring, but the next three years are pivotal to prove that Australia's approach, which has the potential to change the face not just of boards but of business more generally, is a sustainable path. If we succeed, International Women's Day in 2014 will be a true day of celebration.
This is an edited version of an opinion piece published in the Weekend Australian on March 5, 2011. Jillian Segal AM is a director of ASX Limited and NAB; chairwoman, General Sir John Monash Foundation, and Deputy Chancellor, UNSW.