When headlines hit detailing bad behaviour by men at the highest levels of corporate Australia, female board directors can't help but feel despondent.
"When we read about the things that you [media] write about ... you take it back to your board and say, could this happen to us?" says Jacqueline Hey non-executive director of Qantas, AGL Energy, Bendigo and Adelaide Bank.
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"Do we have these same vulnerabilities? Have we got the right processes in place? You say, assure me that we're covered here ... When you have women sitting around the boardroom table they take notice of these things."
Hey is among seven female board directors who sat down in a round table discussion with BusinessDay ahead of International Women's Day next week.
![The women in leadership roundtable: (from left, top) Jacqueline Hey, Jane Halton, Kate Vidgen, Janette Kendall, Marie ...](/web/20170307132238im_/http://www.smh.com.au/content/dam/images/g/u/p/4/8/5/image.related.articleLeadwide.620x349.guo1x8.png/1488518982453.jpg)
After more than one hour of conversation about other topics including executive pay, whistleblowers, technology, Brexit, Donald Trump, and the future of the global economy, it's this issue of gender equality that really fires them up.
These women are no strangers to sexist attitudes held in the business world. They have had long careers in sectors including government, the arts, retail, technology, health, science, and mining. They have witnessed and experienced subtle, and not-so-subtle, discrimination before.
Even against that background it's hard not to be outraged by the news that has engulfed corporate Australia in 2017.
First there was the controversy surrounding Seven West Media's chief executive Tim Worner's affair with another company staff member Amber Harrison.
Then – even as the round table was meeting – there were revelations QBE Insurance chief executive John Neal was having a romantic relationship with his executive assistant and the board would dock his pay by $550,000 for breaching internal policies he put in place to govern such matters.
During the discussion no boss gets named. There's no need. These women know exactly what I mean when I ask them, "aren't you shocked by the headlines?"
Hey, who is also a non-executive director for the Australian Foundation Investment Company (AFIC), Melbourne Business School and Cricket Australia, says it's important not to become numb to the bad news, especially in an environment where most people around the boardroom table are still Anglo-Saxon men.
"I spent years in the tech industry, so I was always in room full of men; I became quite used to that," Hey says. "But I think it's very important that we are shocked, even though it [gender discrimination] is something that we deal with every day."
We've seen very high-profile cases of poor cultures and you wonder, were the board asleep or did they just not know?
Janette Kendall, non-executive director Melbourne Theatre Company.
Where the power resides
Janette Kendall, a non-executive director at organisations including Costa, Wellcom Worldwide and the Melbourne Theatre Company, says rather than shock, she feels "just deeply saddened that cultural shifts haven't occurred".
"We've all worked with extraordinary men but then there are those men with questionable values in the workplace, and they're in positions of power and their behaviours remain unchallenged. It's incredibly sad."
She says it is incumbent upon directors appointing CEOs "to look very deeply into their values and behaviours".
"We've seen very high-profile cases of poor cultures and you wonder, were the board asleep or did they just not know?"
She adds that much of it is about power balance. "It's [about] where the power resides," she says.
"It is reflecting on your own career and where you've been the victim; on the receiving end of inappropriate behaviour; how at different ages and stages throughout your career, how you've felt and reacted to it. It's hard to call it out when you're younger and more junior. Or you call it out and it gets dismissed as a joke."
Kendall, who worked as an advertising executive in the 1980s, recently binged on episodes of Mad Men, the American television series set in the 1960s which follows the lives of advertising executives and explores gender themes often via their sexist male characters.
The critically-acclaimed show has had such an impact on the gender conversation that in his 2014 State of Union Address the then US President Barack Obama, in speaking out against unequal pay for women, said: "It's time to do away with workplace policies that belong in a Mad Men episode."
When she watched the series, Kendall thought: "I was reflecting that not much had changed from the '60s to the mid-'80s. And then when the [local media] headlines hit, those stories, I just felt completely sad. I would have thought that we had achieved more equality. That there was more respect [for women], or that the respect was more universal."
She hopes that by the time her daughter, Alexandra, 23, moves up the corporate ranks that things will have improved.
"She [Alexandra] says the world's changed," Kendall says. "She says, 'you're such a feminist mum. Those things that you experienced, I'm not going to experience that'. I hope that's true."
Australian Institute of Company Directors president, and chairman of Nestle Australia and Bank of Melbourne, Elizabeth Proust quickly responds: "It's probably not."
"Dinosaurs still exist," Proust says.
Boards can uphold standards
Jane Halton in October joined the board of ANZ bank after stepping down as secretary at the Department of Finance.
Halton spent 33 years in the public service and 14 as a departmental secretary. She has witnessed cases of gender discrimination in the public sector, although not any that she's prepared to share publicly.
She says sadly not all men adhere to the high community standards they are expected to, so it's up to boards to remind them.
"The community standard all of us adhere to, and the people we're married to adhere to, we take for granted. It's not the standard that everyone adheres to," she says.
"When you run extremely large organisations, unless there is an unambiguous message about the cultural issues then you're less likely to hear [about them].
"It's hard for people to actually speak up ... You have got to have structural protections for people but you also have to be absolutely clear about what is unacceptable."
Marie McDonald, non-executive director of CSL, Nanosonics and Walter & Eliza Hall Institute of Medical Research, quotes Male Champion of Change and former Army chief David Morrison: "The standard you walk past is the standard that you accept."
"It's going that extra step and being willing to call it out," McDonald says. "It's being prepared to act."
She recalls a moment in her career when she had to deliver "unpalatable news" to someone about their bad behaviour. "I explained why it was in their interest that interest that it stops," she says. "That, if this continues, this is where it will end up..."
The subtle digs
But Kate Vidgen, an executive director at Macquarie Capital, and non-executive director of Aurizon Holdings and chair of Quadrant Energy, says often gender discrimination isn't obvious.
"The most difficult part is all the subtleties," Vidgen says. "The only way you change that – and I've seen this in a couple of organisations – is if the organisation from the top down really believes it. It's not about ticking the box or quotas. It's real belief."Â
Kendall says that naturally comes when there are more women at the table. "When there's more than one female on boards there is [real belief]. When you get significant change, the dialogue changes. You're not just the sole voice."
While there has been progress in gender equality in corporate Australia, it is painfully slow.
The Australian Institute of Company Directors has set a target for 30 per cent of board seats to be filled by women by the end of 2018 and wants ASX 200 companies to voluntarily meet it, rather than face government mandates.
Companies are on track, although if even one or two women vacate boardrooms, the situation rapidly changes.
The latest percentage of women on ASX 200 boards is 25.3 per cent (as of January 31, 2017). This is up from a very low base of 8.3 per cent in 2009.
But there are still 14 boards in the ASX 200 that still do not have any women. And across the ASX 200 there are only nine female chief executives.
"Where the progress is not happening is in executive life," Proust says. "The numbers are quite small."
Even at the level directly below CEOs there is a lack of female representation. "They [women executives] are mainly in HR and marketing, not in the line roles which would lead them to become chief executives," Proust says.
Macquarie's Vidgen says much of it is due to the lack of women in middle ranks. "In their 30s and 40s, when women are trying to juggle families ... often women step back," Vidgen says. "We need to keep women in those jobs during that really tough time."
Wai Tang, non-executive director of Vicinity Centres, JB HiFi Ltd, kikki.K Holding, Visit Victoria and Melbourne Festival, says there needs to be more mentoring in organisations to help young women move up the ranks.
Time to cap CEO pay?
One of the places some of these gender issues meet broader debates is in executive pay.
The issue of executive pay – million-dollar pay packets given to CEOs, resulting in shareholder revolt – is getting a lot of attention, and not just because chief executives are having their pay docked over relationships.
Bonuses featuring so-called "soft targets" such as customer satisfaction and OH&S; have been described as "flaky". But Proust takes issue with the flaky tag that appeared during media commentary following last reporting season.
"There's nothing soft about customer satisfaction, staff engagement and OHS targets," Proust says.
"It would be very unfortunate if the debates we had last year around reporting time, lead to companies going back to just financial targets."
"We need a form of words that describes these targets as anything but 'soft'. What you measure gets paid attention to. That's why they've gone into bonuses."
McDonald agrees saying resources companies would be heavily criticised if didn't have health and safety as one of their targets.
"We've seen that [in recent cases] with BHP - what happened with Samarco - and Rio as well," she says.
Halton says regulators have a particular view about organisations not being driven just by financial targets, especially in the financial sector where there has been much controversy about pay.
In other countries like Britain and Israel, governments have moved to introduce caps on pay in the banking sector. Should Australia do the same?
Halton says putting an "artificial" cap in place is the wrong move. But she believes that there needs to be greater transparency on CEO pay, which is more in line with what shareholders and the community expect.
"If shareholders have strong view we have to listen to that, but there are other ways of doing this that don't impede your competitiveness," Halton says. "You need to look at the [pay] package ... and how you've explained it and how it aligns with your performance."
Proust agrees.
"A lot of this is driven by fact that the average worker is getting no increase or tiny increases and then seeing a CEO getting a 30 per cent increase or even a relatively small increase but the total package is many millions.
"The gap in income equality is widening. And Jane's [Halton's] reference to community concerns is partly around that. Living standards are in many cases falling."
According to figures released by the Australian Council of Social Service in October, there were 731,300 children or 17.4 per cent of all children in Australia living in poverty. Proust says when such disadvantage exists and we're simultaneously hearing about large increases in executive pay, "there's great unease around that."
Tang agrees the system "needs improvement".
"We tend to follow market practice rather than what's right for the company," she says. "Often when we set CEO packages we always go by a benchmark. There's a reference point. But we need to think ... how do we package [pay] to makes sure it fits the strategy of the company?"
Kendall says there needs to be greater transparency about how remuneration is structured.
"Part of it is about communication – how we're explaining and demystifying how executive remuneration is linked to performance," she says. "If it's not linked to performance, then significant increases are not justified."
Proust adds: "And many of our remuneration reports don't do that [provide transparency]."
Need a better culture
The debate on pay in business is linked to the other great topic of modern business: workplace culture.
Australian Securities and Investment Commission chair Greg Medcraft has previously said: "What the board says, does and expects is absolutely critical in setting the tone of the organisation."
This included, Medcraft said, appointing the chief executive officer who has "values that are aligned with the company's desired culture".
Hey says: "What he [Medcraft] says about setting the tone is exactly right. In selecting the CEOs and the KPIs ... In making sure that the right whistleblower polices are in place. In making sure that you're not only talking to your management team but as a board there's opportunities to get out there and see the operations and talk to people."
Proust says she visits Nestle's factories on a regular basis.
"Management says safety is the number one priority. You can live and feel it when you go to the factories. Everybody knows that it is crucial ... Directors are certainly responsible for how the culture of the place is."
All the women agree that culture can also be improved by greater protection for whistleblowers. The AICD wants stronger legal protections and has advocated compensation, although what kind of compensation it has left up for debate.
"We came down on side of there should be compensation but we don't like the American system where people can get large amounts of money," Proust says.
McDonald says it in their "interests as directors to have whistleblower processes working as well as possible so we know as early as possible if there's an issue."
"You really want a system where the whistleblower will come to the company rather than regulator and know that they will be listened to," she says. "That the outcomes will be acted upon."
She also thinks the current laws that require a whistleblower to act in "good faith" need to be changed.
"I don't actually think it matters if they act in good faith or not, I just want to know if there's a the problem," McDonald says.
"If they have not acted in good faith you can take that into account when deciding compensation later. But as a director I want to know if there's an issue and deal with it first, and worry about motives later."
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